How to financially prepare for a child, by stages

Preparing for the arrival of a baby is one of the most exciting stages of family life. A new bundle of joy always brings a ray of sunshine into the home. It’s, however, also the most stressful. You have to make sure that you’ve babyproofed not just the house but your child’s future, too.

Financial preparedness is often overlooked when deciding to have a baby. But really, it’s the most important thing. To make it easy, especially for first-time parent, here’s a rundown of what you need to prep for financially, broken down into different stages in a child’s life, from birth to 18 years old

What to prep for from birth to 3 years old

1. Baby supplies

Breastfeeding is the ideal scenario but if it’s not possible, your grocery budget should be able to accommodate formula milk starting at PhP700++ for an 850g can, which usually lasts for up to five days. Diapers, toiletries, and baby grooming needs can also take up a big chunk of the budget. Acquiring gears such as strollers and car seats is a choice between saving up for premium quality gear or scouring parenting forums and groups for second-hand items that are in good condition.

2. Childcare

Depending on the agreed set-up between parents, childcare options can include hiring a nanny, having a relative care for the child (grandparents for most) or a parent staying at home. Whichever the choice is, all come with varying costs, plus the pros and cons.

3. Life insurance with investment benefits

As early as now, be on the lookout for plans that can financially protect your child. FWD Babyproof , for instance, gets your baby insurance coverage with investment that can potentially grow in value until he’s an adult. If he is ever hospitalized, he will get medical allowances. If something happens to you, all premiums will be waived and your precious one will still be covered. Babies as young as 15 days old can already avail.

What to prep for from 4 to 12 years old

1. Preschool

How to know when a child should be sent to school already? A child who is showing signs of school readiness and interest in learning can be enrolled to pre-kinder programs for socialization and other basic skills. Private preschools in the metro offer programs that can go as steep as PhP100,000.

2. Enrichment lessons

Some of the more popular supplementary activities include music lessons, art workshops, and sports clinics such as swimming, basketball, soccer, etc. Swim lessons for young ones usually start at PhP5,000 for 10 sessions. Sending kids to enrichment classes can also be a good investment for parents.

3. College fund

With school tuition increasing every year, it’s a good idea to start planning for a college funding early. Creating a financial strategy for education will help parents identify issues and concerns when it comes to the income generating capacity of the family.

4. Needs and other expenses

Raising a child also means rising expenses. Clothes will be outgrown and food preferences will change. A child’s needs will be on top of household’s expenses for years to come. The need to have their own money or allowance will also pop up in the latter years of this stage. If a child is taught how to save up, he or she might be able to take care of some wants and needs using money from savings.

What to prep for from 13 to 18 years

1. Education and other school expenses

Public or private education? It all depends on the quality. In the Philippines, some public schools with a specialized science curriculum are on a par with other prestigious private schools when it comes to quality. Regardless of the choice, school years will always keep the budget up with small expenses such as PE uniforms, projects, field trips, social events, and more.

2. Electronics and other materials

Jumping on the electronics bandwagon is inevitable for children these days. Most schools are now utilizing the convenience of online learning portals, thus the need for personal computers, printers, and even tablet computers. It is best to help kids distinguish between wants and needs when talking about electronics purchases.

3. Road to adulthood

Learning how to drive a car is one way to introduce a teenager into adulthood. While responsible driving can be learned, accidents can still happen. But the good thing is, a parent can opt to add a teen driver to the car insurance policy, which also increases its premium.

With the list of budget considerations above, parents can now look into their preferences on upbringing and their child’s needs to be able to create a financial plan tailored to the family’s goals for the future.