What the experts say

Preparing for a baby

It’s a good thing pregnancy gives you “nine months to prepare financially,” said John Schmoll in DailyFinance.com. A new bundle of joy is such great news that it’s often “easy to forget that this baby comes with something—a price tag.” According to the Department of Agriculture, children born in 2012 will cost their parents up to $241,080 each by the time they turn 18, so start planning early. Since the cost of delivery itself can be a major outlay, carefully compare hospital costs and what your insurance will cover at each facility. If you’re taking maternity or paternity leave, remember to set aside some money for everyday expenses. And avoid the instinct to “buy everything”: It’s understandable to want your child to have it all, but you’d be wise to cut down on unnecessary purchases to “save both space and money.”

The cost of splitting up

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Divorce doesn’t take just an “emotional toll,” said Carla Fried in Bloomberg.com. It also comes with a high dollar cost. A 2012 Government Accountability Office report found that, on average, household income dropped 41 percent for women—and more than 20 percent for men—after a divorce. If you’re heading for a split, plan accordingly. Even a simple, amicable divorce “is unlikely to cost less than $5,000 per person.” Double that “if child custody is a factor,” and if a business is involved, expect to shell out somewhere in the ballpark of $20,000. Despite those costs, don’t be tempted to skimp on the services of a financial specialist to help you through the ins and outs of taxes, retirement plans, alimony, insurance, and credit issues.

Prudence in family loans

Be careful mixing business and family, said Daniel Lippman in The Wall Street Journal. Many people assume lending money to family members is a safe bet, but take some precautions unless you want to attend an awkward Thanksgiving next year. “Spell out all the details in a written agreement,” including an interest rate and a payback schedule. “If you aren’t charging interest, you are making a taxable gift of the interest that you waived.” Remember to put yourself first. “Any cash you lend should be money you can afford not to get back.” If you’re going to be upset if your relative defaults, don’t give him or her money in the first place. “You don’t want to risk permanently fracturing a relationship over a few thousand dollars.”