It is no secret that having a baby is one of the most rewarding experiences a person can have. But along with the joy and wonder come a lot of additional expenses. There are a lot of products out there that people need to get to properly support their babies, so they have to ensure that they have the appropriate equipment and funds for whatever comes next.
From a baby changing station to a 7AM Cocoon car seat, it is important that parents are able to get what they desire so they do not feel out of their depth and they are doing everything they can for their baby as they grow and develop.
So, how can you financially prepare for a new addition to your family? Here are some tips:
Start saving early:
It is never too soon to start saving for your future baby’s needs. Open up a savings account specifically for this purpose and start setting aside money each month.
The earlier you start, the more you can put in as time goes on, the more your child will have when they get older, and it can be used for essential things like buying a new car or putting down a deposit for a house/apartment.
Create or update your budget:
Once you know how much you will need to save, take a close look at your overall financial picture, and make adjustments to your budget as needed. This may include cutting back on certain expenses, like eating out or travel, in order to make room for baby-related costs.
Cutting back can be hard initially, but you will get used to it, and as long as you have a solid plan that will help you as time goes on you should be fine, and you will get into the swing of things. Babies constantly need new clothes, toys, prams, etc. so budgeting for these items will help you get what you need without breaking the bank.
Build up your emergency fund:
A new baby means more responsibility, so it is important to have a financial cushion in case of unexpected expenses. Try to boost your emergency fund to cover at least six months of living expenses.
If you are worried about building on your emergency fund initially, you may want to speak to your family members and see if they can help you get it started. You may not want to ask them as it can be upsetting asking for money, but you are doing this for a good reason, and they will understand that.
Research childcare options:
If you plan to return to work after having your baby, start looking into childcare options and get an idea of the costs involved. This will help you make informed decisions about what is best for your family.
Depending on the age of your child you can put them in daycare or hire a nanny/babysitter. You may need to work around that by only going part-time for a bit or alternating shifts with your partner so you both can look after the baby, however, that is not always possible so you may have to drop them off or hire someone.
Be thorough with your research to make sure you are picking the best option that will suit everyone involved. If you can bring in your parents to help out some days, that may be a great help during the start back at work.
Start thinking about college savings:
It may seem like a long way off, but it is never too early to start saving for your child’s education. Open up a 529 college savings plan or another type of account and start setting aside money each month.
Having a baby is a big financial responsibility, but with some planning and preparation, you can make it work for your family. By following these tips, you can help ensure a bright future for you and your little one.