With the initial rush of love and joy of a new baby comes the unknown, and it’s easy to feel off balance-you’re never really emotionally or financially ready for children. But the truth is, understanding your budget is crucial- you’ll be in this parenting role for years to come, so let’s get to planning for the future.
Having a baby goes beyond the dreamy baby shower and the actual pregnancy. This little tiny human being depends on his parents (aka ME) for everything, and I mean everything, to survive.
But aside from the survival of your baby physically, as parents, you should also be surviving the first year financially. From living off of one income to a slew of new expenses and purchases, it’s easy to get lost in the shuffle and end up bankrupt your first year if you’re not being careful, but don’t worry–here are some tips for budgeting the first year for a new baby.
Budget, Borrow and Buy Used or Generic
Budget wisely. Budget wisely and re-prioritize your life and your expenses. Give your checking account a little “wiggle room” during baby’s first year – this will allow you to breathe a little easier during this time of joy. (PLUS: Consider using it to open baby’s college savings account!)
If you ever find yourself questioning yourself about purchasing that penguin looking onesie or those cute flowery baby bottles, always think twice and ask, “does my baby really need this right now?” and oftentimes, the answer to that is usually a hesitant no from a partner who is trying to save money. Budgeting wisely avoids the unnecessary headaches that come with urgent baby bills.
Borrow if you can. If you have any family members or friends who had kids that outgrew their crib, bassinet, or even their baby books, ask if you could borrow these items. They might even let you keep it or have it for an inexpensive price. Borrowing items will save you a ton of money in the long run, especially with items that your baby will outgrow quickly.
There is no harm in buying the generic brand. Your baby will never notice if his pacifier was from an upscale brand or if it was bought from Costco in bulk (in fact, he’s probably never going to remember it).
Here’s a pro-tip: If you’re really hesitant to buy generic brand baby products, do your research online and lookup if the brand you’re buying from is good for the baby. Keep in mind that what’s important is that your baby is fed well, clothed properly, and loved by mommy and daddy.
Take advantage of the hospital offerings
Ok, what I am about to tell you is not a secret- take advantage of the hospital offerings. This will save you a ton. Call it stealing or call it the hospital gifting things to you. Either way, hospitals encourage new moms to take things that they have in the hospital for your new baby and for yourself. From newborn diapers to those comfy newborn blankets and formula this will be enough for the first month if you ask and take it.
Sell and Save
During their first month, babies grow, and they grow fast.
Don’t need it?
Sell your baby items on OfferUp. You can even consider selling your beloved baby items on Facebook baby groups for a fair price for used items. This will free up a ton of space in your home and declutter the baby nursery.
Save items that can be used for the future (or if you’re planning to have baby #2 sometime in the future). Buy items that are reusable and easy to store for the future. You or someone you know could always use the playmat over and over again in the future.
Purchase items that can only fit in the space of your baby nursery. If your baby nursery is too cluttered, then it’s probably a good sign that you’re buying too many things for your baby.
Find a product you love? Hold your horses. Shopping around for a better price can help you save enough for future splurges. And coupons are your best friend. Most major baby brands like Pampers and Enfamil formula will reward you just for signing up for their emails or rewards programs by offering you deals galore.
Here’s a pro-tip: purchase things with dual or multi-purpose like a convertible crib. A changing table with built-in cabinets or crib that you can turn into a small bed once your baby is big enough can help seize and use that space wisely in the nursery.
Friends and Family Plan
Use your friends and family for babysitting. Childcare could be more expensive than your mortgage. To help offset this cost, consider enrolling in a dependent care flexible spending account before giving birth and set aside pretax money for daycare, a nanny or babysitting (as long as you use the money during that calendar year).
Borrow as much as possible from other parents, including used baby gear. Your friends might be glad to put their items to good use, and you can pass on the favor when you’re all done.
Plan for Tomorrow
The 10K Mark – Before the baby arrives, save at least $10,000 for baby-related expenses during the first year. It sounds like a lot, but can make it easier to absorb all those extra costs.
And you’re not done putting money away…Always plan ahead. When you plan on going out, not only should you figure out where to go and what to do, but you should also figure out how much you’re going to spend and definitely stick to it. Similar to your baby budget, make sure to plan out when your baby is going to have doctor check-ups and have the finances ready beforehand.
Learn to priorities necessary expenses over the luxuries. Pay off your bills ASAP such as your home, your car, and food FIRST.
A good third of your check can go to the financial wants. Having a baby might mean that sometimes you have to make some financial sacrifices to care for your little one, but you don’t always have to miss out on a good treat-yourself once in a while.
A good 20% left from your check should go to your savings. This is a good strategy to do so you’re all set during unexpected costs that could come in the future.
Focus on Your Retirement
There are tons of creative ways to put your kids through college, but there’s no replacement for your 401(k) or IRA.
Get Term Life Insurance and Make a Will
Now that you’re a parent, your kids are relying on your income. Update (or create) your will and life insurance benefits. It’s no fun to talk about, but important to guarantee the financial security of your family.
These bundles of joy could make or break your bank depending on how you budget. Now is the time to start taking the steps that will set your family up for financial success.
*The post How to Financially Survive the First Year: Tips for Budgeting for a New Baby appeared first on MintLife Blog.