Having a baby can be a wonderful and exciting experience for everyone in the family. However, adjustments will need to be made in several areas, including finances. Although a baby is small and seemingly inexpensive to feed, clothe, and care for, you will be surprised to see how costs can quickly add up, starting that first year. The following tips can help you to revise your finances to accommodate your new bundle of joy.
Do a Financial Analysis
Start by asking yourself a few questions. Some of these could include: “What is a credit score?”, “What’s a good credit score?” or even “Why should I care about my credit score?” Review your family’s financial status to estimate income over the next few years, along with monthly expenses and ongoing debt. You should also get a copy of your credit score to make sure it is accurate and up to date. It is not uncommon for credit records to contain an occasional error, such as a name change or new address, or a credit account being closed. Contact the credit reporting agency with corrections if needed.
Update Your Budget
Before the baby arrives, carefully review the monthly or annual family budget. Look for items that will need to be adjusted. These might include things like the food budget if you plan to feed the baby formula, and later, commercially prepared baby food. Adding a child to your health care insurance policy may increase premiums, along with the additional of medical deductibles and co-pays.
Plan for Necessary Supplies
Daily diapers will be needed, unless you are using cloth diapers that will be washed at home. You will need to purchase baby clothing and equipment, such as a crib, changing table, high chair, car seat, and stroller. Although toys and books are optional, some playthings are generally helpful as infants begin to grow and develop. Childcare may be necessary if one or both parents will be working.
Consult Financial Experts
There are plenty of articles, videos, and books on family finances for when a baby comes along. For example, check out “Budgeting for Baby: 13 Money-Saving Strategies” by Heather Hatfield at WebMD. Many resources are available through your doctor’s office or online. Even mommy blogs offer practical tips on how to cut costs after having a baby. You may want to consult a financial adviser about investing for the future, especially for the child’s eventual college education.
Trim Unnecessary Expenses
We often spend our income more freely before a baby comes, enjoying vacations, dining out, and popular entertainment venues. When the baby arrives, some of those expenditures are impractical, as an infant may get fussy or need to be on a schedule at home. Cutting back on unnecessary costs can trim the budget and make your finances healthier than before. Some families keep just one vehicle, a used one, and they follow a strict budget for groceries and utilities when feasible. For example, they set the summer air conditioner thermostat at 75 instead of 70 to reduce operating costs. Many parents start buying at thrift shops, especially infant clothes, since babies grow so quickly. Barber colleges are cheaper than salons for haircuts and styling services. There are many ways to spend less to make room for the baby’s expenses. You can also use monetary windfalls, like salary raises, bonuses, and tax returns to cover baby-related costs.
Parenting co-ops provide opportunities to exchange and share baby necessities as well as parenting tips. Mom groups online, at church, or within the community can be great sources of information about discounts on things needed for a baby. Exchanging babysitting services can reduce childcare costs.
Bringing a baby into the family is the perfect time to reassess your financial health. Carefully review your budget and related documents to make adjustments that will meet the new little one’s needs without putting you in financial jeopardy.