What is Co-Managed Care for Veterans?

And Baby Makes…Bills

Each year, the U.S. Department of Agriculture produces an report on families’ child-rearing expenditures. They’ve been doing this since 1960 to help states develop their child support and foster care guidelines. Possibly also to give parents-to-be a bonus dose of anxiety.

This years’ USDA report found that middle-income parents who welcomed a new child in 2012 can expect to spend nearly $300,000 over the next 17 years. For purposes of this report, the USDA defines “middle-income” as a pre-tax income between about $60,000-103,000. Annual expenses for a child in a two-child, married couple family in this income group range between $12,290 and $14,320.

Oh, and note that the report stops at age 17, which means that that $300,000 price tag does not include college expenses.

Congratulations on your upcoming bundle o joy, my friends. Maybe it’s time to do a little budget planning.

If you’re like most military families, there’s a three-syllable explanation for why budgeting goes by the wayside: P-C-S. But whether you’re in your first trimester or your first round of potty training, a few smart steps can get your financial freight train back on track and let you enjoy your newest little soldier.

1. If you have a little time, do a dry run

Make an annual budget with the items you think you’ll need each month. Then take a leisurely walk through the aisles of a baby store or two, making notes of everything you’ve forgotten (especially if this is your first baby). Re-do your budget to include those new items.

Just the act of writing down your expenditures can go a long way toward helping you build financial security. You can’t work with what you don’t know.

If one parent is considering leaving the workplace, spend a couple of months living on one income while you sock the other’s away in savings.

2. Baby-clothes bonanza

Consignment shops, thrift stores, garage sales and eBay are a new parents’ best friend. As fun as it is to shop for and buy those brand new baby clothes, it’s equally un-fun when you realize that the little darlings outgrow them really fast. The adorable name brand onesie you found at the fancy boutique for $35 can almost always be found at a kids resale shop for $2.50. There are loads of sellers on eBay who will sell you scads of gently worn items in “lots” for five or ten dollars – your child will never know they’re not wearing brand new clothes.

3. Baby books

You may feel a strong pull to buy every popular parenting book and subscribe to every new parent magazine on the newsstand right now, but after junior arrives, your reading time will be a precious commodity. That’s not to say that parent education isn’t important – it is. But you can save yourself some cash by picking up those good reads at your local library (as long as you remember to return or recheck them on time.)

4. Suburban Parenting Vehicles

As long as your vehicle has four wheels and is in good working order, there is absolutely no need to rush out and take on another car payment – or a higher car payment for a new minivan or sport utility vehicle. You can parent just as well in your own car. A stroller and child seat fit just as well in a sedan as it does in a minivan.

5. Day care

Whether one parent is able to stay home with the newbie or not, the most precious kind of support you can receive is a volunteer babysitter. If you have relatives and friends close by who can help, this is extremely valuable.

If not, find out if your employer offers a flexible, tax-exempt spending account for childcare expenses. If they do, sign up for it.

6. Feeding

Formula, bottles and bottle brushes are expensive. Store brands are your best friend for feeding supplies. Store-brand formula has to pass the exact same FDA approvals as the name brand and the costs are about half.

7. The Bottom line

Expect to change about $2,000 worth of disposable diapers from birth until potty training is complete. Store-brand diapers are almost identical to name brand and- again - they’re half the cost.

8. Remember these numbers: 529

Your child may earn scholarships galore. But just in case, start a 529 or Coverdell educational savings account and reevaluate how much you’re saving each month in your TSP. You may want to have more withheld from your paycheck each  month to help cover college expenses.

The preceding discussion is not tax or legal advice. Consult your tax or legal professional regarding your specific situation.

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