Financial Planning Makes Growing Family Smarter

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Bills.com offers 5 ways to budget for baby

For growing families, a bundle of joy also can bring a bundle of bills, but Bills.com president Ethan Ewing has five steps to financial salvation.

The U.S. Department of Agriculture estimates that the cost to raise a child ranges from $134,370 to $284,460. These figures, however, include the cost of a home, which a family might own even if they have no children, as well as other factors averaged from all U.S. consumption.

"The decision to have or adopt a child can be a complex one. Fortunately, finances are one piece of the puzzle that families can anticipate and plan for," Ewing said.

Ewing's suggested steps include the following:

1.    Make a financial birth plan: A recent survey of new parents found that they budgeted $776 for hospital costs, but wound up paying $2,000 for childbirth. Call your insurance company, doctor and/or hospital to find out exactly what costs will be covered and how much out-of-pocket medical expense you'll be expected to pay.

2.    Build a budget: Hopefully, especially if you are considering a family, you are living within your means and using a budget. Create a new budget that takes into account the costs of a child, such as child care, medical bills, diapers, babysitting, additional food, travel costs and any lifestyle changes you are considering, such as one parent leaving his or her job or moving to part-time work. Before you get started, understand your financial health with the free online BillsIQ calculator (http://www.bills.com/iq). Then, estimate the costs of having a child with an online calculator.

3.    Plan for adoption: No question about it, adoption can be expensive. Costs can range from under $2,500 for foster care adoptions to $40,000 and up for a private infant adoption. However, adoptive families can be eligible for a tax credit of up to $11,390 to compensate for some of those costs. Grants, gifts and loans also might be available to help. Talk to a qualified adoption counselor to learn more.

4.    Ignore the Joneses: In today's world, it's easy to imagine your child falling far behind if he or she isn't playing a musical instrument, speaking a foreign language, playing daily with groups of friends and on a sports team before kindergarten. Still, the most important activities for children are priceless (and very budget-friendly): Exercising in the yard, reading library books together, drawing with crayons or sidewalk chalk, cooking meals and singing. Don't panic about the costs of raising a child; instead, focus on what is right for you.

5.    Expect the unexpected: Any child can present special needs, from braces to speech therapy to behavioral issues to a physical accident. Do your best to prepare with appropriate insurance and by taking appropriate safety precautions. Other than that, know that nothing presents surprises like parenting, and if possible, leave room in your budget for unexpected costs.

"By planning ahead, you can prepare for the expense of adding a new member to your family," Ewing said. "Most importantly, practice good general financial management -- that way, you'll be prepared for anything your personal baby boom brings."

Based in San Mateo, Calif., Bills.com (http://www.bills.com) is a free one-stop portal where consumers can educate themselves about complex personal finance issues and comparison shop for products and services including credit cards, debt relief assistance, insurance, mortgages and other loans. As the online portal to Freedom Financial Network, LLC, the company has served more than 40,000 customers nationwide since 2002 while managing more than $1 billion in consumer debt. Its RSS feed is available at http://www.bills.com/news_releases/.

In 2008, Entrepreneur Magazine ranked Bills.com as the No. 3 fastest-growing U.S. company on its Hot 100 list. Bills.com also was named a finalist as "most innovative company" in the American Business Awards in 2008. Company co-founders and co-CEOs Andrew Housser and Brad Stroh were named to the Silicon Valley/San Jose Business Journal's "40 Under 40" list in 2008, and received the Northern California Ernst & Young 2008 Entrepreneur of the Year Award for online services.

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Aimee Bennett

Ethan Ewing
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