Starting a Family

When it comes to life, few things have a greater impact on your future than welcoming a new child into the family. It’s an exciting time for certain, with so many decisions to be made – from choosing a name and buying clothes, to picking out a crib and decorating your baby’s room. Having a baby also adds a new set of decisions regarding your financial future - from covering the basic expenses of raising your child, to saving for college or expanding to a larger home. It’s a commitment that lasts a lifetime, and one that requires careful consideration to make sure you have adequate insurance protection for your family’s financial needs. Here are some of the major factors to consider when starting a family:

The cost of having a baby or adopting a child.
The cost of raising your child.
The cost of a college education.

The cost of having a baby or adopting a child.
While the joy of welcoming a new child to your family is priceless, it is important to plan for the costs associated with childbirth or adoption. According to a study by the University of Florida, childbirth expenses - including prenatal care and hospital delivery - average from $7,300 to $10,300 depending on where you live. Health insurance may cover some or most of the costs, but check your policy for details.

Statistics from the National Adoption Information Clearinghouse show that expenses can range from $4,000 to more than $30,000 for private or independent adoptions. These figures include costs for birth parent counseling, adoptive parent preparation, birth expenses, legal fees, and other agency or governmental expenses. Travel and escort fees for adoptions outside the United States can result in even higher expenses.

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The cost of raising your child.
As part of its ongoing activity, the U.S. Department of Agriculture periodically calculates the cost of raising children. In its 1999 Annual Report, the cost of raising a child from birth to age 17 ranged from $111,570 to $234,780. Households on the lower end of the scale were those with annual incomes of less than $36,800. Those on the upper end of the scale had household incomes of more than $61,900. The study estimated expenses in seven categories: Housing, Food, Transportation, Clothing, Health Care, Childhood and Miscellaneous Items. Estimates were based on the U.S. Government’s Consumer Expenditure Survey and Consumer Price Index data.

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The cost of a college education.
The cost of a college education has more than doubled in the last ten years. Annual in-state tuition for a public college averages $10,000 per year. Costs for private colleges can be three times higher. Factoring in 5% annual inflation for the next ten years, the cost for four years at a public university could easily reach $65,000 and more than $200,000 for a private college. (Source: Kiplinger's Personal Finance Magazine, March 1999).

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