How to Afford a Baby as a Single Parent

Raising a baby as a single parent can be tough, but it doesn't need to break the bank. Financial experts share smart money tips for handling parenthood on one salary

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Having a baby can be expensive. According to the U.S. Department of Agriculture, a middle-income family can expect to spend $245,340 on their child's food, shelter and other necessities between birth and her 18th birthday. Add to this the fact that out of the 12 million single parent families in America, more than 80% were headed up by single mothers, and it's easy to see there's a lot resting on pregnant women's shoulders. If you're having a baby solo, the good news is you can make it work if you plan it right. Here are some helpful tips.

Establish a baseline

"The key to preparing yourself for your baby's arrival is first knowing how much you spend pre-baby," says Katy Song, a certified financial planner in Mill Valley, Calif. who also focuses on helping young couples and families. You can use a free online tool like Mint.com to help you know where every cent is going. Also, it's important to estimate what your expenses will be once the baby arrives, including everything from diapers and formula to bouncy seats and "mommy-and-me" classes. One biggie: if you're on your own, you most certainly will need to figure out who's going to watch your child when you head back to work. If you will have to pay for childcare, determine how that will fit into your budget before the baby arrives. Costs will vary greatly based on the kind of child care you choose, how often you need it, and where you live. Many states offer childcare assistance programs based on gross income. If you're only earning one income, or nothing at all during maternity leave, you could well qualify. A quick Google search will pull up your state's offering.

Start saving

Once you know where you stand financially, you can determine if you'll be able to afford all your expenses once your baby is born. If you're coming up short, now's the time to start saving. So how do you do that? "First, look at your 'fixed' versus 'discretionary' spending to see where you can cut some fat out of your budget," says Song. Fixed expenses are things that usually cost the same month after month, such as health insurance, rent, or your mortgage. Discretionary expenses vary each month and while some items under this category, such as groceries and doctor's bills, are necessary, many others, like entertainment and traveling are not.

Next, the key is to cut back on discretionary spending where you can. For instance, many people can curtail shopping and eating out—try to make your own lunch during the week and limit restaurant meals as much as possible. And, as tempting as it might be, don't overdo it when shopping for your baby. She'll outgrow every stitch of clothing very quickly, and she definitely won't need a room full of gadgets and toys.

Another way to cut: Take a look at your fixed spending and see where you can lower some costs. For instance, providers such as Ting and Republic Wireless may drop your cell phone bill to as low as $5 or $10 per month, says Becker, and many people still pay for a land line each month even though they never use it. Examine your cable bills to see if you can opt for a less expensive option. If you're using Netflix, Hulu, and Amazon to watch movies and your favorite shows, you might want to cut out cable television altogether. You can possibly work out lower car payments, too, and eliminate certain subscriptions and memberships. "Any one-time effort that frees up room in your budget month after month will be a big help," says Becker.

Bottom line: It's important to stick with a monthly budget as best as you can and as soon as you can. Easy-to-use apps like You Need A Budget can help keep you on track. "Getting used to your new budget before the baby arrives will help you build up a savings cushion to make the transition a little less stressful," says Becker.

Plan for the future

It's certainly a subject no one likes to even think about, but it's essential, especially for single parents, that you create a living will as soon as your baby is born so you can designate who will become his or her guardian should something happen to you. That might be the baby's other parent, but if not then first talk to the person who you'd like to raise your child in case the unthinkable happens and then make sure that that's indicated in your will.

Also, many experts advise that new parents, especially single parents, get life insurance. "Term life insurance is a great way ensure that your kids will always have the financial resources they need, no matter what," says Becker. "You'll want enough coverage to provide for their basic needs until they are able to support themselves." So how do you go about getting life insurance? "First, check with your employer to see if they offer life insurance as a benefit—ask how much, if any, they provide for free and if you can buy additional coverage," says Julie Asti, a certified financial planner in Berkeley, Calif. "However, the best option is to secure your own policy from a life insurance company. This way if you leave your company, you own your own life insurance policy and you can take it with you." However, don't secure life insurance on your child. "There's a much higher probability that something will happen to you rather than your baby," Asti adds. "When you crunch the numbers, those policies are horrible financial deals. Save your money and put it towards your own policy."

There actually is such a thing as stay-at-home single moms

Sarah Titus, a single mother of two in Idaho and founder of the blog Saving Money Never Goes Out of Style was homeless five years ago after her husband of 14 years took off and left her and her children destitute. "Today, I live very comfortably as a single stay-at-home mom," she says. How can you make this your reality, if only for the three months of unpaid FMLA leave? "There are so many ways you can make money collecting things to sell on Craigslist or eBay," she explains. "It is more than possible." She gives the example on her website of selling Littlest Pet Shops figurines, the tiny clothes for which alone have fetched her $5,000.

Remember: both parents have a legal duty to support a child

Both the mother and father of a baby have a legal duty to support him until he turns 18. A mother's parental relationship is usually a given since she gives birth to the baby, but paternity can the subject of dispute (anyone who's tuned into Paternity Court will get the gist). If paternity cannot be established through the usual route, like a signed document acknowledging paternity or results of a positive paternity test, a court order can require the father to assume parental responsibility. Child support varies state by state, but it's important to remember it's there to help. "here are state laws that govern child support from fathers, and they should be held responsible," says Titus. "The court system and/or the child support division of welfare will take care of that. You don't need to be on welfare to get their help with child support."

Ask for help

Dealing with finances as a single parent can be really difficult, but you don't have to tackle it by yourself. "Money is a hard subject to talk about, but if there's something specific you're struggling with I guarantee you there are thousands of other people struggling with the same exact thing," says Becker. "Whether it's friends, family, professionals or even online forums, there are always people who are willing to lend a hand." If you do want to hire a financial advisor, ask relatives and trusted friends for recommendations. The National Association of Personal Financial Advisors can also help you find some options in your area.

Don't lose hope

"You can be homeless or the richest person on earth. Without hope, you have nothing," Titus says. "I'm living proof that you can dig yourself out of any mess."

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