Finances and Starting a Family

how does having a child affect taxes

By Miriam Caldwell. Money in Your 20s Expert

Miriam Caldwell is a freelance writer with a specialty in personal finance. She believes that you can lay a solid foundation by starting to manage your finances in your twenties.

When you decide to have your first child it may be slightly scary. Everything changes once you had a little one to your life. It is important that you be aware of the changes that are coming, especially the financial changes and prepare for them, as you get ready to have the baby. It is important to plan for your child's future now. You should take the time now to create a solid family financial plan .

1. Paying for the Delivery

2. Daycare or Staying Home

Another area that you need to consider is the cost of daycare. Depending on your area daycare costs can be quite

expensive. You may consider one spouse staying home with the baby, especially if one spouse if making around $20,000 a year. Take home pay after the cost of the daycare expenses and costs of working will have about the same effect as working at home. This is a personal choice for each family to make, but it is worth crunching the numbers to fully consider all of the options. If you cannot make the numbers you work you should reconsider walking away from your job. However, you may find that you can't afford to work with the cost of daycare and that it makes more sense for you to work from home or to focus on staying home with the kids. If you do decide to head back to work, you do need to be able to cover expenses while on your maternity leave.

3. Planning for Baby Supplies

Source: moneyfor20s.about.com

Category: Taxes

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