In the United States, a women’s average age at the birth of her first child is 25.2 (which is considerably higher than it was in the 1970s when it was 21.4). However, a CDC study shows that more and more women are now waiting until their late twenties or early 30s to begin having children. Taking cultural clues – for example, Duchess of Cambridge Kate Middleton was 31-years-old when she gave birth to Prince George – and without the backing of a royal family, a focus on career establishment has prompted many women to wait on starting a family.
An interesting outcome of this trend is that parents are thinking about the age gap between siblings earlier. For some, age is a big factor in how soon they try for another child. However, and increasingly, the cost of a second baby is a part of this equation that can’t be ignored. Having another child is a big decision that you will need to make with your body, home and finances in mind.
Understanding What’s Ahead
When you add up the average costs of housing, food, transportation, healthcare, clothing and education, the USDA predicts that it will cost you $241,080 to raise a child. Your second child will cost approximately 80 percent of that total. These numbers are, of course, estimates that depend on where you live and how you spend. Regardless, childcare costs are a big part of these estimates and the cost isn’t going to be paltry.
On average, sending your infant or toddler to a daycare center in the United States will cost approximately $11,666a year. For pre-school aged and older children, those costs will drop by about two to three thousand dollars a year. For parents using a home daycare (rather than a center), these costs are typically less for both younger and older children to account for the lack of overhead. Lastly, the cost of hiring a private caregiver, such as a nanny or au pair can vary depending on your situation but the expense of this service falls in line with the high price tag of home and daycare centers. There’s just no two ways about it, numbers like these are intimidating to parents with young children.
Crunch The Numbers
When you’re weighing the financial pros and cons of continuing to work or committing to becoming a stay-at-home-parent with two (or more), the idea of organizing your time and money can feel overwhelming. Use a budgeting sheet or this calculator to get a hard look at unavoidable expenses like mortgage/rent, commuting costs, emergency funds, and insurance premiums.
If your job provides you or your family with benefits – such as healthcare, vision or dental – you will want to see what the costs will be if your family is moved onto your spouse’s plans or how much you’ll pay to sign up your growing family for private or federal health insurance. Doing this will save you from too many surprises (there will always be a few surprises, though, so don’t neglect that emergency fund), and get your family into the right frame of mind for adding to your brood and making the final decision about returning to work or not.
The Art of Stuff
With any luck, some of the upfront costs for your second child have already been taken care of, such as a changing table or toys. Keep in mind that the age gap between children can be cause for some creative financial navigation. For example, if you bought a transitional crib for baby number one, they may still be using it when baby number two arrives. If your stroller, car seat and base is also still in use, you will be looking at additional transportation needs. To avoid buying a stockpile of seats throughout the first few years, check out the “grow with me” style of car seat a consignment store, Craigslist or available, for free, through a friend or family member.
And with two babies, stock up on seat bases where you can find them affordably! For instance, if you have a grandparent who helps with pick-ups and drop-offs at daycare, you’ll want to get them their own base for car or booster seats. Buying more gently used equipment may be an absolute necessity. Chances are, if you are looking for it, someone in your network is looking to offload it!
Family Finances In The Palm Of Your Hand
Logistically, a second child is reason enough to make an overhaul of your financial picture. With more awareness of the costs involved in childrearing, you’re better equipped to tackle a restructured budget. Your children will more than likely have different schedules. Using mobile software or apps to assist you in organizing both your time and your finances.
You Need A Budget and Goodbudget are two popular systems that allow you and your partner to stay updated on what’s being spent and where. For time management, apps like Cozi and Intuition will keep your schedules aligned. Give yourself (and your spouse) time to learn these programs and the whole family will be better set up for success. CommunityAmerica offers FinanceWorks for members so investigate what your financial institution may offer.
With some preparation, your growing family is a reason to celebrate. Remember, the majority of people in the world (and throughout history) have made it work. Just as your heart grows with love for your second baby, so will your ability to manage your home.
Your babies are growing up and getting ready to leave the nest for their first years of school and maybe you’re thinking of going back to work. Next week, we’ll discuss preparing yourself to reenter the workforce. For more advice on navigating financials or saving up for your growing family, click here for friendly advice from the CommunityAmerica Credit Union Savin’ Mavens. This post was written by Maven Kat Hnatyshyn.