Karl Eggerss was on CBS discussing the costs of having a baby and what tax credits are available. Here are some items to consider.
Sharon Ko: If you’re in a position to plan for a baby, time is on your side. Here’s Ken’s top five money-smart tips to budget before the birth. First look at some of the upcoming expenses. The average cost of a hospital delivery is about $10,000. And the average cost of raising one child is equal to a Lamborghini.
Karl Eggerss: Is one of the spouses not going to go back to work? Because if so, again, the budget has to be looked at from that angle. So now we’ve possibly gone from a two-income household to a one-income household.
Sharon Ko: Number two, check your benefits.
Karl Eggerss: Are there any types of subsidies? Is there maternity or paternity leave?
Sharon Ko: And if adoption is the route, financial advisor Karl Eggerss says make sure you’re not missing out on tax incentives.
Karl Eggerss: If your modified adjusted gross income is less than about $250,000 per year, you’re eligible for the adoption tax credit of $14,300.
Sharon Ko: Number four. Think about your baby’s medical care.
Karl Eggerss: You generally have about 30 to 60 days to add the child to your health insurance.
Sharon Ko: And here’s the last one Eggerss recommends. Bump up your savings.
Karl Eggerss: After the birth, a lot of people give cash as a gift. Start a fund for that child for education right off the bat. And I think that ties into perhaps having a short -term goal before you even decide to get pregnant or adopt.
If you need help with education planning for your children, click here.