March 31st, 2017 | Miller Advisors

Knowing where you stand financially

 

My wife and I are expecting our first child this coming October and we are beyond thrilled.  This excitement shifted to fear and paranoia after we read an article on CNBC tilted The Diaper Dilemma.  We knew that raising a child was going to be expensive, but we were not prepared for what those costs might actually look like.  The average cost of child care in Washington State is $22,997 which makes us the 9th most expensive state in terms of child care costs[1].  To put this in perspective, that amount of money is more than I ever paid for my undergraduate tuition at Western Washington University in any one year.

So what can we do?  Knowing that every action has an equal and sometimes opposite reaction, we will undoubtedly have to make considerable sacrifices of our own goals in order to care for our future child.  Over the past four years we have been working very hard at building our emergency savings funds, saving money for a down payment on a house while at the same time making sure we make monthly contributions to our retirement accounts.  It would seem that it is safe to assume that if this is truly the cost of child care in our state that our emergency savings fund will quickly be depleted along with the savings we have set aside for a down payment.  Instead of saving for retirement we will now more than likely be saving for future college costs which may be close to $200,000 for four years at Washington state college 18 years from now.

My wife and I are so excited for this new chapter in our life and we do not want to be gloomy in our outlook on our finances.  Rather we must have an open and honest conversation with each other as to how our financial plan has changed.

Financial planning empowers people to understand how their decisions impact their future financial success.  If you find yourself wondering how a change in the circumstances of your life might impact your financial future, please set an appointment with us and let us take you through the financial planning process.  The results of your plan might not be what you expect, but at the very least you will have an understanding of where you stand financially and what steps you need to take to improve your likelihood of success.

[1] http://www.cnbc.com/2017/03/20/diaper-dilemma-child-care-costs-as-much-as-a-year-of-college.html