Mastering "Baby Economics"

LOUISVILLE (WAVE) - What costs more, raising a child or buying a home??

There is no doubt, that bundle of joy brings a bundle of bills, but online calculators can help you anticipate the costs from groceries to insurance to a bigger car.

"All of those things really add up and its something you don't think about when you are picking linens for the crib," says Financial Planner and mother of three Sarah Tims, who adds parents need a financial baby formula long with how-to baby books as part of their required reading.

Here's her 5 step plan:

#1 Find out what your pay will be on maternity leave.

If it's reduced, live on that lower amount while your pregnant as a test.
"You need to know that so you have more choices going into your first year," says Tims.  "Ultimately if you can't afford to stay home or can't afford a long maternity leave you need to know that."

#2 Save for health care costs.

Your may have higher premiums and more doctors visits.
"It could be something between 2 and 300 dollars a month depending on your premium, depends on your plan. And the well baby co-pays could be anywhere between $15-30."

#3 Research not only life but disability insurance too.

#4 Find other ways to save.

For savings investigate dependent care tax credits for child-care up to 35% of expenses with a maximum of 3-thousand per year per child. High earners may find better savings with flexible spending accounts.

#5 Consider a Roth-IRA for triple duty savings.

"You can take out contributions if you need them for living expenses or emergencies. You can save that money for college without paying a penalty and ultimately there for you when you turn 59 and a half and need it for retirement," adds Tims.

The latest figures released by the United States Department of Agriculture show that the average family pays $222,360 to raise one child.

Costs are highest in the Northeast and West, followed by the Midwest.

Raising a child in rural areas and the South tend to have the lowest costs for raising children.

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