Economics of a New Baby

Babies are expensive! There are initial expenses such as clothes, crib, car safety seat, and stroller, continuing costs such as diapers and food, and medical costs. You might also consider the cost of child care if you work outside the home instead of staying home with your baby.

If you decide to stay home and you have been a two-income family, switching to one income is sometimes challenging. You will need to adjust your household budget and resolve any conflicts that less money may create.

Hints on the Economics of Being a Parent:

• It may actually be cheaper to stay at home with your baby than to go back to work.
• Entertain at home. Dinners cost less to cook and you do not have to pay a baby-sitter. Potlucks are also an easy way to lighten your workload.
• Baby-sitting coops are a great way to make new friends and will help your baby develop social skills.
• New parents are great targets for all sorts of promotions. You can expect to be deluged with phone calls, direct mail, and callers. Take your time, and think carefully about whether you really need the products.
• As with everything else in parenting, things generally go much better if you prepare ahead of time. If you can, use the time before you have the baby to save money, to pay off debts, and to get your finances in better shape.
• Economics and finances can be a source of conflict and anxiety in many families. You may want to schedule regular times when you and your spouse can review the family's finances and decide what to do.
• After you become a new parent, you need to make out a will. Decide who will raise your child if something should happen to you.
• If extra income is needed, consider working at home. There are many kinds of home-based businesses.