Whether you are deciding to have a child after years of planning or your new bundle of joy is an unexpected addition, having kids is expensive. From diapers and childcare to braces and college, parents sign themselves up for a continuous barrage of purchases, both large and small. Child-related expenses can add up on their own, but parents often have their own unrelated financial situations to consider. Budgeting and financial planning are critical for new or expecting parents, and these tips can help you start parenthood on firm financial footing.
Budgeting (Before and After Baby) is Critical
New parents have tons of expenses to worry about, but unrelated debt and bills can add significant stress. Assess your financial situation (preferably before your child arrives) and develop a plan for paying off debt and becoming more financially stable. Instead of paying monthly minimums and spending the rest, consider following a leaner budget and becoming more aggressive with loan repayment. Reevaluate your finances regularly. Making budgeting part of your routine can help you keep a handle on debt and build your savings.
Budgeting for Birth: Don’t Welcome Your Child With Medical Debt
If you are welcoming a new child into your family the old-fashioned way, you will have significant medical bills to consider. While adoption has its own fees and expenses, the costs associated with childbirth can be astronomical. During the family planning stages, analyze your healthcare coverage (and your spouse’s, if you have one) to see how much you can expect to pay for childbirth and prenatal care. Something as simple as choosing a different hospital or delaying conception by a few months can make a huge difference when it comes to copays and annual out-of-pocket maximums for some plans, so be sure to do your research.
Prioritize Purchases and Take Advantage of Hand-Me-Downs
While it may be tempting to go out and buy the baby’s first stroller, a full wardrobe, and a top-of-the-line baby food maker, it is important to start with the essentials. You may find that you really don’t need that fancy diaper disposal unit, or maybe you’ll wish that you’d spent more on a reliable baby monitor. Spending conservatively (while still ensuring that your new child has a safe car seat, crib, and other supplies) can give you more wiggle room when budgeting for other purchases. Finally, embracing hand-me-downs is an excellent way for new parents to save where they can. Babies and young children grow fast, and you may find that your new bundle of joy only spends a few weeks or months in a particular clothing size. Take advantage of any offers you receive from family or friends, and make sure to pay it forward!
Take Control of Your Finances with EveryIncome
EveryIncome is dedicated to providing our clients with career and finance management tools to help them create a stable financial future. Regardless of where you are in life, our system of tools and guided learning is tailored to fit your specific needs. Take control of your financial health today. Contact the team at EveryIncome online or give us a call at (571)370-5400. For more tips and tricks to foster financial wellness, follow EveryIncome on Facebook, Twitter, and LinkedIn.