Nothing beats the excitement when you find out you’re pregnant and there will be a baby among you very soon! After the initial excitement fades and reality starts to sink in, you realize you need to make major changes in your families finances so you expanded family can maintain a comfortable life. This is why financial planning for a new baby is an extremely important step to take.
#1 – Open A Savings Account
Some people become anxious when a baby comes along for a number of reasons. Most of the time, they’ve had a difficult childhood because of tight finances. It’s best to open up a savings account and start saving so you can meet your newborn’s short and long-term needs. Here are some tips for selecting a savings account.
It’s very important to establish a budget that will allow you to start saving so your child can experience a financially secure childhood while they’re growing up. There are several expenses parents need to consider when having a child.
There are basic child rearing expenses like clothes, medical and dental care and furniture. There are also education costs if you choose private school and eventually college tuition, books, room and board.
#2 – Who’s Going to Work
Both of you and your partner should have a serious discussion about work touching upon the following:
- If you both you and your partner are working decide whether she will return to work after having the baby or will she remain a stay at home mom.
- If you mutually decide your partner will remain a stay at home mom determine how you will maintain your household on one income.
- If your partner decides to return to work after having the baby see if your employer has a dependent care account you can set aside pretax dollars.
- If you partner wants a job with flexible or part time hours make sure she gets the job before she begins showing visible signs of pregnancy – many employers are reluctant to hire pregnant women because of the known medical expenses and maternal leave.
#3 – Sell Your Stuff
One way of raising money is to sell some of your belongings you’re willing to part with. Hold a garage sale, which is an inexpensive way of selling your beloved collectibles such as your childhood baseball card collection. In addition to getting additional income this will reduce the clutter at home and make additional space for your new baby.
#4 – Take Advantage of Benefits
In the UK, there are numerous benefits that come with having a new-born. From child benefit to grants to extra maternity support. Understanding these benefits and taking full advantage of them is a good way to help your new family. Go to Emma’s Diary to review the list of available benefits.
The US doesn’t offer child benefit although there’s a child tax credit system for parents or guardians of children under 17 who meet certain requirements. Children must be US citizens, US nationals or resident aliens to qualify.
There is also child and dependent care credit for taxpayers who are working or seeking a job, and pay someone to care for a child, disabled spouse or other dependent. Among the requirements are that children must be younger than 13.
#5 – Only Buy What You Need Not What You Want
Only buy what you need. Shopping at baby stores every other weekend is a potential waste of money. The Internet is full of tutorials for recycling and reusing many baby things you can simply make at home. Diapers, baby food and various consumables cost a lot since you use it every day.
While disposable diapers are the most expensive option to use, suggest choosing less expensive diaper brands. Breastfeed your baby and enjoy him/her while they are cute and cuddly and fit just right in your arms. As far as toys are concerned, let your imagination run wild.
Babies respond to care and affection. They don’t care what brand of toy you give them. All they want is for you to pamper them, talk to them and be warm and cuddly.
#6 – Pay Off Your Debt ASAP
One of the most important action you can take is to pay off any debt before your baby is born. The sooner you pay off the debt, the better it will be for you and you can focus on saving more money that you will need during the delivery and in case of emergency.
Having a baby budget will put you at ease since it means that money won’t be stretched too far or more than required. The most important thing is that at the end of the day, you will be able to provide your baby with the kind of life that you have envisioned and there will be a sufficient amount of money saved for child benefit.
Closing Thoughts
Adding a new baby to your family comes with a long list of responsibilities – don’t try to do them all at once. Prioritize and tackle the most important items on your financial to-do list first.
Start with medical bills and medical insurance claims that will be some of the first financial obligations you’ll encounter while expecting. Then move on to budgeting for pregnancy and the first several months of your baby’s life.
With 18 or more years until your little one leaves home, time would seem to be on your side. But — as the saying goes — blink and they’re grown. Now is the time to start taking the steps that will set your family up for financial success.
From the first doctor’s appointment until high school graduation, the US Department of Agriculture reported in 2013 it costs approximately $241,080 for a middle class family to raise a child. Click here to get details on the specific costs parents will incur during the journey.
