Having a child is a huge responsibility and one that most parents don't take lightly. Many people wait until they feel they are mentally, physically and financially prepared to welcome a new family member, but a recent survey is showing that many parents aren't quite as financially prepared to have a child as they thought they were.
It's true that no matter how prepared you think you are to be a parent, there are often additional costs and expenses that pop up that are hard to predict. The first annual Policygenius Parents & Money Survey showed that just under half of parents weren't prepared for the financial cost of being a parent. A staggering 42% of parents surveyed felt they weren't prepared for all the expenses that come with raising a child.
According to the survey that was conducted of 1500 adults with at least one child under the age of 18, 25% of those surveyed said the cost of childcare was what caused them the most financial strain, while 20% felt that the cost of food for their child was more than they expected. Eighteen percent felt that extracurricular activities and recreation caused a financial strain, while 14% underestimated the cost of medical expenses.
Education is also a big cause of financial strain for parents. Of those parents who felt they were financially prepared for children, 23% said they didn't have a college savings account or a college savings plan to help prepare for that expense.
In addition to having a college savings plan, parents who also had private insurance felt more financially prepared for children. Only 29% of parents with private life insurance felt unprepared financially for children, where that number jumps to 49% of parents who don't have life insurance. Parents who have a will are also less likely to feel the financial pinch when it comes to kids. Only 20% of those who have planned for the future with a will feel financially stressed whereas 45% of those without a will felt financially unprepared.
Not surprisingly, parents are stressed about paying down debt, saving for the future and saving for the college the most.
While most parents can relate to these financial stresses, Policygenius gives some great advice to parents on how to budget better and become financially fit, even with kids. From drafting a household budget to increasing your retirement savings account, their advice can help everyone plan better for the future.
You can read the entire survey as see the remaining advice for becoming financially fit here.
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