If you're thinking about starting a family or already have kids, you probably know about the big-ticket items to account for in your budget: clothing and food, babysitters or nannies, school tuition and college savings. But what about the unexpected costs that might pop up? Add these items to your list to be prepared when the time comes:
1. Extracurriculars
As your child gets older, they may start to become interested in more structured extracurricular activities like swim classes, afterschool programs, team sports, dance classes, music lessons or the drama club. These hobbies can help kids make friends, learn new skills and begin to explore their talents — but expenses can add up. Recent estimates say parents spend on average $731 per child every year on after-school and summer activities.
2. Academic help
Does your child need a little extra help at school? You might consider a local tutor or after-school programs. Your price will depend on the program you think is right for your situation, but you can expect to pay a tutor hourly for their services. For recurring expenses like these, Ally Bank’s spending buckets can help you keep track of where your money is going.
Recent estimates say parents spend on average $731 per child every year on after-school and summer activities.
3. Travel and transportation
Between shuffling your kids to school, extracurricular activities and play dates with friends, you're likely to spend more on gas. You may even decide to upgrade your vehicle to a more family-friendly option.
When you travel as a family, you'll also need to budget for a larger hotel room or vacation rental to accommodate the kids. If you’re not planning to road trip, keep in mind additional airfare or train tickets will be required.
Read more: Saving up for a family vacation? Here’s how Ally’s smart savings tools can help
4. Medical expenses
From routine checkups to potential prescriptions, healthcare costs should be a regular part of your family budget. One major expense to keep on your radar is orthodontics. Your health or dental insurance may offer some coverage, but it is likely not going to fully cover the price of braces, retainers and related dental care, which typically cost between $3,000 and $10,000.
In case of a medical emergency, not being prepared financially will only add to your stress. Setting up an emergency fund in an Ally Bank Savings Account can help you cover these unexpected expenses with less strain.
5. Special dietary needs
Some children are born with allergies and specific dietary requirements, while others develop them later in life. In either situation, you may need to budget extra for specialized foods since they can be more expensive than regular groceries.
6. Gifts for friends and teachers
From birthdays to Teacher Appreciation weeks, there will be times throughout the year where you’ll likely want to purchase gifts for those caring for your children, or your children’s friends. Setting up a bucket and a budget for these gifts in advance will help you prepare.
7. Home modifications
As your family grows, your home may need to grow, too — think things like adding safety features, creating study spaces or even adding extra rooms for new family members. Home renovations can come with a lot of unexpected costs, so set a goal and work toward it using the savings buckets in an Ally Bank Savings Account. Its smart savings tools can help you reach your target faster.
8. Insurance
For expenses like health insurance, coverage for multiple people costs more than coverage for one. For example, workers contribute an average of $525 per month for employer-sponsored family health insurance, compared to $114 per month for a single payer. And while a driver’s license might be further down the line for your child, keep in mind the additional cost of adding a teen to your auto insurance.
How to prepare for unexpected expenses
Build some cushion into your parenting budget to account for these extra expenses. Begin putting aside funds with an account that does more for your money, like an Ally Bank Savings Account. When you utilize smart tools like our buckets and boosters, you can make the most of your savings and ensure you're financially prepared for your family’s financial journey.
