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Show I Sun Advocate Price, Utah Tuesday May 7, 2002 9B ipagp Sun Factor in future education costs when figuring child rearing budgets If the child care costs are clearly the same or more than the second salary contributions, the choice may be easier to make than parents may realize. . Other options may include the parent working e from home or during the evenings when the working parent can be with the children. There is nothing like a new baby to wreak havoc on a couples financial situation. As a step in planning for a child, local residents should develop a detailed baby budget. The household's financial guidelines should include the costs of formula, diapers; insurance copayments, day care, furniture, equipment (strollers, car seats, etc.), clothing, education savings and other needs. Couples should also build a financial cushion into the baby budget in case they have Unexpected medical bills. The planning process is an especially good (ime for parents to take a hard look at their spending habits and squeeze out some excess. Couples residing in the Castle Valley area should remember that having a child involves a major lifestyle change. And the change may require prospective parents to automatically cut some unnecessary spending such as expensive restaurant bills, entertainment and travel. However, prospective parents should also consider that there are many new lifestyle costs created by having a child. The added household expenses include paying for babysitters, covering the costs of planning family outings and fees for parenting By JOHN FORD Financial adviser According to the United States Department of Agriculture, a . 'middle-incom- e family residing at locations across the nation will spend more than $250,000 to raise a child. And the child rearing figure does not include any needed infertility treatments, special lessons or private schools. In addition, the federal agencys estimate assumes that the child rearing costs end when youth turn 17 years old and the figure does not include college or higher education expenses, which alone can add another $100,000 to $500,000. . Despite the sobering costs, couples do not stop having babies in a down economy. Instead, the adults do a bit more financial planning and budgeting. Although Carbon County residents who decide to have babies need to be prepared for the new bundles to cost a bundle, local couples also should know that there are several tax breaks available to parents. The federal income tax breaks include: A personal exemption for each year a child qualifies as a dependent For 2002, the personal exemption amount is $3,000. Possible qualification for the federal child tax credit The credit is Currently $600 and will rise to $ 1,000 by 2010. Thx Credit Possible qualification for the Federal Child-Car- e - up to $2,400 a year for on$ child and up to $4,800 a year for two classes. A or more children in 2002. college education at a good private university costs x flexible in account a dollars to of $100,000 pre-taupwards today. Ability put spending for child care if an employees company benefit plan allows it. If the costs increase by 5 percent per year that equates to a A parent should have three types of insurance in place - health, '$250,000 bill for a child whos born in 2001 and enters college in 18 years 2 . However, if parents start saving early, even during a disability and life. Adults should make sure the health insurance covers pregrecession, time is on their side. y nancy and Despite a tough economy, there are smart financial investcheckups as well as at least 80 percent of to help couples grow money and reach their education ments delivery charges. Add a new baby to the policy right away. v planning goals for children. The time to get. disability insurance is before people get pregFor example, now may be the time for parents to consider nant. putting money into a Section 529 plan. The plans are sponsored Most policies will cover pregnancy complications, but conby states around the country and managed by financial institu-- . tions for the. sole .purpose of financing an education. sumer should re&d the fine print Check the waiting period, definition of disability and duration of benefits in addition to the The plans let parents contribute funds for college according amount of the benefit. to an investment strategy that they choose, The selected plan will Finally, you will need life insurance to replace your income if then invest according to that strategy, generally using mutual And, even better, the something happens to you. Sit down with an experienced insur-- . funds. The earnings grow ance broker or financial advisor to determine just how much life money is federally tax free when parents take funds out for qualiinsurance is right for you and your family. fied education expenses. an economic are families If people decide to withdraw the funds for reasons other that recession, Especially during many and dependent on two incomes. For the first time since the U.S. Cenqualified educational expenses, the earnings sus Bureau began tracking numbers, families in which both parsubject to a 10 percent penalty The Economic Growth arid Tax Relief Reconciliation Act of ents are working have become the majority among married 2001 is scheduled to sunset, effective Dec. 31, 2010. Following couples with children. If individuals are a working mother or father, they should re- the designated date, qualified distribution from 529 plans may view the employers personal leave policy carefully. be taxable. Parents may be eligible for coverage under the Family MediCarbon County residents who are contributing money to educal and Leave Act and may take up to 12 weeks bf leave with cation accounts on behalf of someone who will be attending a continued health coverage in connection with the birth or adop- higher education institution after 2010 should consider the potential impacts. tion of a child. There is also the Coverdell Education Savings Account, forAti employer is not required to pay people while they are on vacasick individuals use often and accrued may merly called the education individual retirement account, for leavevalthough Carbon County taxpayers to consider. tion leave. . After the initial 12 weeks, there are many options to consider. The U.S. Congress bumped the contribution limit for the education Due to growing child care costs as well as some families savings account from $500 to $2,000 annually for each ' one parent home with the children, consumers' child younger than age 18 beginning January 2002. ere nee may choose to live on one income. Again, the money taken out of the savings account for qualiincome fied smaller elects with to at the the higher education expenses when a child enters college is tax Typically, stay parent Wedns idarf stay-at-ho- . . Indudaa flwMc brood, aoup ori $750 fiii ajU AAtfwnej. Broiler $095 Y besMrtst2 Catering 179 S. Main, Helper IndudM garlic breed, aovp or aalad dj & 472-986- Price wwunyfiwse 6 . Tty Our Delicious Tacos and Bunitos. We alsohaveuelicious Desserts. . well-bab- Chicken Alfredo Katkul four-yea- r . Nlfht Lasagna part-tim- Stopinkodayl . lacolime . - Open 6 Days h Week Mon. Thurs. 10:30 . 9:30 Frl. - Sat 10:30 Creekview Center, Pries . 637-84- 10:30 -- 03 willie-taxabl- Carbon Country Club Mothers Day Brunch - Sunday, May 12, 2002 from 12 noon to 4 pm Prime Rib, Fresh Salmon, Chicken, . Peel and Eat Shrimp, Salad & Dessert Bar 1 , Ext. For reservations call 637-23- 1 Private Club for Members Only free. home. Other important factors to think aboufwhen one spouse is Also, beginning in 2002, Coverdell ESAs can be used for 401-- k or other ' is a insurance coverage, kindergarten to 12th grade expenses. considering leaving job withdrawals from Parents get the job types of retirement plans And the ability to later savings and force based qualifications needed and the availability of jobs the education savings accounts. The Economic Growth and Tax Reconciliation Act of 2001 within the industry. re-ent- er tax-fr- ed Many Carbon County residents may be trying to decide whether it is a wise financial decision to keep two household incomes and add the burden of child care costs or opt to have one parent.' In making the financial decisions related to having a child, parents should first calculate the costs of caring for a youngster. (When weighing the expenses, people should include taxes and child provider possible benefits if they choose to hire an ' rather than using day care. Then parents should compare the child care costs to the financial contributions of the second salary, subtracting associated expenses for work transportation, business clothing, etc. stay-at-ho- Hi-w- ee Too Old to Ride Hofses - Now He Rides Hogs. CEU SUMMER DANCE AND RE. Credit or Non-cred- ' Just pn Topi DNCTI200 ONCE 1110 MfDDvCS PHED 1370 Beg. Weight Training Individual Workout Time. PHED2370 Adv Weight Training . 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