Can You Afford to Have Another Child? 8 Financial Questions to Consider

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by: Lindsay Hutton
Are you considering having another child, but are worried about the financial aspect of adding to your family? Raising a child is no doubt expensive, and while ultimately your decision might not be based on dollars and cents, it's still important to take stock of how another little bundle could impact your family, and find creative ways to make it work.
Working mom on laptop with baby on lap
Monthly Income
It's no secret that the economy is struggling, so be honest with yourself — how secure is your monthly income? Do you have enough savings to cover six months of expenses should you or your spouse lose your job?

A second, part-time job might not sound ideal, but consider how far a second paycheck could go in terms of saving. If that isn't possible, look for creative ways to supplement your income, such as selling items online or babysitting.

Additionally, look for small ways to save money around your home, like using compact fluorescent light bulbs, utilizing your local library for books and movies, and creating meals at home instead of eating out. The savings will really add up!

Woman getting pregnancy ultrasound
Healthcare
What prenatal costs does your health insurance cover? You'll need to visit your doctor many times during your pregnancy, and the costs can add up. Don't forget to add in prenatal vitamins and other supplements you may need to take. After delivery, just remember that another little person in your family means more healthcare costs and higher premiums.

Questions about health insurance can be confusing and overwhelming. Use this list of questions to ask your insurance representative to help streamline the process and help you get the best care possible.

Pile of pink baby supplies
"Start Up" Items
Diapers alone can cost around $100 a month. Add formula to the mix and it's a hefty monthly bill. The good news is that for subsequent children (especially if you have another of the same sex) you're probably already stocked with tons of baby gear and clothes, so that will be a savings compared to the expenses with your first.

Shop around in thrift stores for any furniture or big ticket items you might need. If you have a friend or family member pregnant with their next child, consider doing a clothing swap to freshen up your baby's wardrobe or to stock up on clothes for the opposite sex if you need them.

Do keep in mind, though, you may need to replace some of your gear. For example, the American Academy of Pediatrics (AAP) recommends avoiding older, used car seats to ensure maximum protection for your child. Most have an expiration date printed on them and if they don't, the rule of thumb is six years from the manufacture date. The AAP also recommends using cribs certified by the Juvenile Products Manufacturers Association.

happy family moving into new home
Living Space
This question isn't whether you want to move — it's whether you'd need to move. If so, can you afford the extra costs of moving?

You'll likely have a bigger mortgage to pay more for a larger home. Refinancing your mortgage is a way to lower your payments, but just be aware of the costs involved before making this decision.

If you rent, consider how much you'll need at lease signing. Most landlords or management companies require first and last month's rent, as well as a security deposit and sometimes a realtor's fee.

Aside from moving costs, furnishing a larger home can be expensive, too. Instead of buying all new furniture, look for easy ways to redecorate on a dime, like these 10 cheap home makeover tips.

Happy baby in car seat
Vehicle Space
If your car is filled to capacity already, think about what kind of car you will need. Buying a used car, or leasing, can often mean big monthly savings. With a little research, you might be able to get a bigger car for the same amount you spend on your current car. While you're at it, shop around for new car insurance, too.
Two children playing at daycare with woman
Daycare
If you already have a child in daycare, you know the expense can be staggering. Adding another child to the roster even from the same family rarely gets you a discount. The average cost of daycare for one child in the United States is around $11,500 a year, or just under $1,000 a month. Prices can be almost double the average if you live in a city or in an area of the country with a higher cost of living.

Look for creative ways to cut down on daycare costs. Ask a relative to watch your child one day a week, look into nannysharing with a neighbor, or talk to your employer about flexible hours so you can overlap childcare with your spouse. All of these options can mean big monthly savings.

For some people, having more than one child in daycare is more expensive than a second income provides, so you may want to look into whether having one stay-at-home parent is a better financial decision. Use our calculator to see if you can afford it.

Happy daughter and father playing indoors
College
The average annual cost for college has increased by 6.5% over the past decade. According to the Department of Education, the average cost per year at a public university for 2012 is $15,100, and $32,900 at a private college.

By the year 2030, one year of tuition could cost over $44,000 at a public school, with the total cost of a four-year degree totaling over $205,000. If you plan to add to your brood, consider setting up accounts now that will help you prepare for their future, such as a 529 savings plan.

Looking for more ways to shrink the college tab? Check out these 12 tips to help pay for college.

Happy family on vacation smiling at beach
Fun Money
As you know, a baby has a way of disrupting those amazing plans of exotic travel and wild nights out. You might be seeing the light at the end of the homebound tunnel: Do you want to start the clock over again? It may require that you get more creative with your priorities and how you fit fun (and time for your spouse) into your life.

Do you need some ideas for cheap family fun? Check these out!