ACCC provides consumers with tips on financial steps they need to take when preparing to have and raise children
September 11, 2019
Raising a child can be one of the best and most rewarding experiences, but it comes with a high financial cost. Consumers should know how to prepare their finances before becoming a parent. To help, national nonprofit American Consumer Credit Counseling (ACCC) offers consumers tips on how they can prepare their finances when having children.
“There are a lot of new responsibilities that come with raising a child,” said Steve Trumble, President, and CEO of American Consumer Credit Counseling. “Parents often tend to underestimate the costs of raising children. It is important for consumers to plan financially. so they don’t find themselves underwater in debt.”
In a survey by NerdWallet, 36 percent of consumers planning to have a baby think it costs between $1,000 and $5,000 to raise a baby in the first year and 18 percent think it costs $1,000 or less. According to the study, the average potential cost of raising a baby in the first year is about $21,000 in a $40,000 income household. These expenses include life insurance for two parents, housing, food, transportation, child care, health care, health insurance and miscellaneous items such as diapers and clothes.
ACCC offers tips on how consumers can prepare financially for children.
- Update budget – Having a child means one more individual to care and be responsible for. It is important that consumers reconfigure their budget to include all the expenses that come with having children, such as diapers, childcare, food, etc.
- Look over health insurance – Consumers should take review their health insurance coverage before having a baby so there aren’t any unexpected bills. After having a child, consumers need to add them to their health insurance.
- Emergency fund – For consumers who don’t already have an emergency fund, now is the time to start one as kids are prone to accidents and raising a child comes with high costs.
- Child care – If both parents intend to go back to work, then they will need to find a daycare or nanny, which can take time. If possible, consumers should start their research while on maternity leave so more work is not missed. Do extensive research to find affordable prices.
- Get life insurance – Getting life insurance is an important part of a family’s financial planning as it ensures dependents are financially taken care of if the family’s main breadwinner dies.
- Make or update a will – If consumers don’t have a will, now is the time to make one to ensure their family is taken care of. If they already have a will, make sure to add all new beneficiaries.
- Retirement – It is important that consumers don’t forget about retirement while raising a child. They need to continue to contribute and make sure they are staying on track.
- Start saving for college – College costs are increasing, and the best way to handle these high costs is to start saving as early as possible. Though college is years away for newborns, the sooner consumers start to save, the more money they will have for their child’s education.
ACCC is a 501(c)3 organization that provides free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:
- For credit counseling and student loan counseling, call 800-769-3571
- For bankruptcy counseling, call 866-826-6924
- For housing counseling, call 866-826-7180
- Or visit us online at http://www.ConsumerCredit.com
About American Consumer Credit Counseling
American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management through credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling and financial education concerning debt solutions. To help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loan assistance, youth and money, homeownership, identity theft, senior living, and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free financial education resources, log on to ConsumerCredit.com or visit https://www.consumercredit.com/debt-resources-tools/