Preparing for a new baby can be an exciting time for any family, but one that comes with its own set of costs. The costs of raising a child are steadily rising, and the latest figures may look daunting to many soon-to-be parents. As of 2018, the cost of having a baby in America was pegged at $10,808, and raising them until age 18 will run up parents an average of $233,210. With the bills and upcoming expenses coming in fast and hard, it’s easy for expecting mothers to become overwhelmed and begin to seek ways to stretch their current family budget to make space for a new member of the family. Ideally, you want to have your expenses and budget nailed down before baby arrives, and by implementing a few ideas in your household’s daily routine, you can be sure to make that happen.
Get Organized With Your Financial Reality Pre Baby
Don’t wait until the baby is born to get used to the financial reality of having a baby. Instead, adapt your current household budget starting from now. Implementing your post-baby budget earlier means you have a chance to get adjusted to any changes that may need to be made. It also gives you time to explore what cuts you can make in your current spending and actually witness the results of those cutbacks by the time the baby is born. Start with replacing luxury spends such as dining out for home cooking and meal prep, and look to save on energy usage around the house. Make use of comparison tools to secure lower rates on your utility bills, such as electricity and gas. Specialist providers such as Quake Energy allow consumers to access current rates using a zip code calculator, making the comparison process easier and quicker.
Aim to have a general idea of the overall spike in costs by your second trimester, and add in those costs from then. While spendings such as diapers or baby formula won’t exist yet, you can opt to have them automatically transferred into a savings account each month, just like any other household bills you may have. Budget for the standard expenses such as diapers, toiletries and formula, along with miscellaneous and seasonal expenses that come with a baby, such clothing.
Get Rid Of Higher Interest Debt Leading Up to Baby
Debt always comes with a cost, and that can weigh heavily on a family’s budget. In order to stretch your budget to accommodate a new baby, one of the smartest things you can do is to remove or reduce any obligations that can be draining on your income. In most families, these include debt and its interest repayments. Besides mortgages, households have $8,107 in credit card debts, which carries average interest rates of 14-19 percent, according to Wallethub’s personal finance study in 2018.
Build A Baby Budget – The Earlier The Better
The money saved from making cuts in your budget before the baby comes and the amount saved from eliminating high-interest debt can then be funneled into a baby budget account. This account should not only aim to cover initial birth expenses, but also those coming after the birth, and the reduction of income that may occur thanks to Mom being out of employment immediately after. While companies allow for timed maternity leave, you may not be able to head back to work at the set time, or you may have to change your working hours to complement your new family’s schedule.
Borrow And Gift Before Buying Baby Gear
It is easy to become excited and head out to the store to buy all the gear for your upcoming baby. Parents spend $13,186 in the first year of a baby’s life, largely on short term baby gear. You can save as much as 80 percent on in-store prices at thrift stores and garage sales. Most of these items are only used for a few months, so there isn’t a lot of wear and tear. Alternatively, you can opt to add those long term use and big-ticket items to your baby shower registry, or ask family members who are parents for any spare items they still may have. Items such as high chairs and baby bouncers come with removable liners, which you can remove, wash and sanitize in preparation for your child. Finally, after a few months when your baby has outgrown it, you can return it, or choose to pass it on to someone else in need.
Getting ready to welcome a new baby means preparing yourself emotionally, mentally, physically and, of course, financially. These suggestions are just the tip of the iceberg when it comes to making your budget work with a baby on the way, but the key takeaway is to start now.