As exciting as it is to become new parents, it can be very expensive. According to US News & World Report, middle class families spend, on average, almost $12,980 per child yearly. That being said, preparing yourself financially for a child is essential. We've got the budget tips you can implement now to make sure you're ready when that bundle of joy arrives.
It's easy to anticipate the cost of essentials like diapers and wipes, but there may be other expenses you're not thinking of. Babysitting services, medical visits, and other unexpected costs can easily add up. By making a budget now, you can protect yourself from financial bumps in the road.
Experts suggest that you use the zero-sum budget in order to outline your monthly income as well as the expenses. In this system, you give every cent you make a "job". Each dollar is allocated to something—expenses, bills debt repayment, or savings. By taking a serious look at your finances in this way, you'll be able to see when you're spending more than you should, and re-allocate the funds accordingly.
Depending on where you work, benefits during maternity (or paternity) leave will vary. Some states provide disability coverage—while others don't. More than likely, you're going to experience a drop in income. Figure out what your benefits are, and give yourself time to plan and create a bridge. If you're in a two paycheck family, some experts recommend living off just one income for the duration of your pregnancy (and banking the other one). Otherwise, commit to saving a portion of your income to supplement the dip you'll experience.
Childcare is probably one of the biggest struggles for working parents. Stay ahead of the game, and start looking at options while you're pregnant. Figure out costs. And talk to your human resources department—some employers offer childcare savings options or incentives you can take advantage of.
As a new parent, it can be tempting to invest in all the gadgets and gizmos out there—but it's important to hold back. There are some essentials you need for baby—like a crib, car seat and a brand new lightweight stroller—but there are so many others that just aren't necessary. Do you research—ask friends and colleagues and read as much as you can. Figure out what you need. And look for second hand options (child consignment stores and Facebook groups are a great place to start).
You need to know that food is responsible for taking a big bite out of your household budget. It is also true that as a new parent, you might not always get the time or energy for cooking most nights. Therefore, instead of purchasing food from restaurants, it is a good idea to prepare meals in bulk, so that you can easily heat your lunch or dinner. Moreover, this helps in saving up a lot of time, which means that you are going to spend more time with your baby. In case if you are already in debt, it is a good idea to understand the debt relief options that you have. In order to know more, you can visit Nationaldebtrelief.com.
Before baby arrives it's important to understand what this will add to your policy (in terms of dollars), and what your deductible will be for things like giving birth and doctor's appointments. By having an idea of these costs, you'll be able to work them into your budget.
Don't wait until your child's a junior in high school to save for college—get a head start today. Look into your state's 529 Savings Plan and set up an automatic deposit that fits with your budget. Every little bit helps!
We'd love to hear your best budgeting tips for life with baby. Share in the comments and spread the love!