Thinking of expanding the family?

By KARA McGUIRE, Star Tribune

Last update: July 4, 2009 - 10:01 PM

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THINKING OF EXPANDING THE FAMILY?

Awaiting a new addition to your family or thinking about having a child? Here's what personal finance columnist and mother of three Kara McGuire suggests:

1. Mock up a baby budget. Envision how you think your expenses will change with another child. Add diapers to the ledger and subtract many of those late nights at the bar. Try to live on one salary if you or your partner is thinking of staying home. This will give you an idea of whether you'll have to cut back your spending to afford a child.

2. Understand your benefits. Learn all you can about your health insurance, your workplace family leave policy and daycare accounts. You don't want to be hit with a surprise hospital bill or miss out on benefits that can lower costs.

3. Start shopping. Spread the word about your pregnancy or adoption as soon as you're comfortable. You'll be surprised by how much loot you can get for baby without spending a penny. I'm giddy when presented with hassle-free opportunities to get rid of unwanted kid stuff. If you can't find most stuff for free, hit the classifieds, then the thrift stores and then consignment stores before buying new. Exceptions: I'd feel uncomfortable not knowing the operating history of my breast pump, crib or car seat. And my new stroller was worth every penny.

4. Reconsider spending. During nap time, I tweaked our budget, streamlined our savings accounts and shopped for deals on household items. I was going to shop around for cheaper insurance policies, but a new mom's got to get her rest, too.

5. Calculate. Use online tools to figure out the cost of raising a child (www.cnpp.usda.gov/calculator.htm) and the cost of college down the road (apps.collegeboard.com/fincalc/college_savings.jsp).

While the numbers that pop up are staggering, developing a game plan for big expenses is an important part of parenting.

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