Raising Kids. How You Can Plan For the Costs
The idea of raising a child is indeed exciting. However, it also brings with it a tremendous responsibility on the part of the parents to manage their finances before starting a family.
From birth to the completion of higher education, raising a child is a long process which can cost over half a million dollars.
Parents often keep their focus on just a few years after the birth of a child. But considering long-term costs beforehand can save them from trouble in the near future.
By some estimates, the costs of raising a child have increased by more than 50% as compared to the past decade.
They include all factors such as medical expenses, child care, education and activities or hobbies – they all add up!
Families can handle the increasing pressure by planning their financial matters.
The decisions need to consider things such as one partner not working but the expenses of a child increasing and retirement age getting closer.
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Planning AheadWith this in mind, it’s probably good idea to prepare for all the expected costs before the birth of a child.
Circumstances can change in the future, but planning saves you a lot of trouble.
You have to consider various costs such as hospital visits for mother and child, expenses of purchasing clothing and food for your baby, child care – the list goes on.
Your house should also be suitable to accommodate all family members for years to come.
Choose a home that is spacious enough to accommodate you and your family for years without the need of purchasing a new property.
Educational CostsWhen considering educational costs of children, parents often tend to overlook the long-term expenses. In 2012/13, the taxpayer spent $13,943 per full-time primary student in the classroom.
And, according to The National Centre for Social and Economic Modelling, Australian parents spend, on average, a total of $50,000 on their child's education and childcare.
If you intend to send your kids out of area for their education, you may have to factor in additional costs such as accommodation.
Apart from education, children also participate in extracurricular activities. These activities help them stay fit and keep their minds fresh.
Make sure that your children are able to take part in activities of their choice without financial constraints.
Parents undoubtedly want their children to enjoy different activities, but economic issues restrict them. Through prior planning, they can steer clear of such problems.
Pre-Defined BudgetYou can prepare a budget for the birth of your child and update it from time to time. However, make sure that you do not exceed the budget specified for different tasks.
Spending too much on a single need may make you unable to meet other essential requirements.
Long-Term PlanningLong-term planning helps you avoid financial issues. You can meet urgent monetary needs without any problem.
Many people tend to forget about post-retirement planning. You should focus on this matter as well. Do not forget about post-requirement planning while thinking of your child’s future.
Not only will it save you from financial problems but also help your kids in the long run.
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- Business Name
- Elliot Watson Financial Planning
- Business Category
- Accounting & Taxation
- Official Website
- elliotwatson.com.au
- Business Number
- 23 001 774
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- 19 Kenrick St
The Junction 2291
New South Wales
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