Expecting? Necessary Budgeting Tips for New Parents
If you’re expecting a baby, don’t let the expression “another hungry mouth to feed” lull you into a false sense of security. Adding new humans to your family isn’t cheap, and food is just one of the ways that babies make money disappear.
You will have to buy food, of course — and on the other end of the baby, there’s an infinite re-upping of diapers and wipes. Even minimalist parents pile up mountains of merchandise, then there are doctor copays, higher insurance premiums, child care — oh, and they never stop growing, which means you’ll have to keep buying them new clothes every few months until they’re old enough to support themselves. The point is, it starts out expensive and keeps growing, so you’ll need a budget.
Coordinate With the Other Adult
If you’re raising the baby with someone, avoid the financial friction by getting on the same page with that person before the baby arrives. A money discussion is a must, and it should include:
- Big things like planning for reduced income during maternity/paternity leave, the cost of child care vs. the benefit of two incomes and calculating your new health insurance premiums
- Nuts and bolts stuff like budgeting for formula vs. breastfeeding and whether you’re saving money with reusable diapers or spending for the convenience of disposables
- Distant, but expensive things like private school tuition or a college savings account
Anticipate the Expenses for the Crucial First Year
If this is your first kid, you’ll never be able to imagine how much stuff you’re going to need no matter how much you brainstorm. The good news is, neither brainstorming nor imagination is required. Take a few minutes and plug some data into a baby-cost calculator, like the one offered for free by BabyCenter. It breaks down expenses into one-time purchases like nail clippers and a bathtub and recurring expenses like baby food and diapers. You’ll get an accurate snapshot of what to expect week to week and month to month in that critical first year — and a good idea of where to start cutting costs first when money gets tight, which it’s sure to do.
It Won’t Work If You Don’t Keep Track
An expense calculator is a good place to start, but keeping track of everything as you go is where the real work begins. An expert writing for The New York Times parenting section suggested creating a monthly spreadsheet dedicated to baby expenses. The insurance broker PolicyGenius offers a good one that you can tailor to your life for free. The digitally inclined will instead use one of the many apps designed to help new parents manage their finances when sleep is scant, stress is high and there’s no way to make the crying stop. Simple, You Need A Budget (YNAB), Mint and Wally are among the best.
Never Too Early: A Parents’ Guide To Teaching Your Kids About Money
Avoid the Stuff Trap
Baby merchandise is a $70 billion industry that never stops growing. Yes, some products and technologies have driven amazing gains in safety and efficiency, like car seats and strollers. But the latest $40 hunk of molded plastic won’t make parenting any easier. It will, however, make your space more cluttered and your wallet lighter. The people selling those products know that you’re frazzled, anxious, tired and learning as you go — and they’re banking on you believing that your kid will drown or fail kindergarten without it. The single best thing you can do for yourself and your baby is to practice the art of living with less and save every dollar possible — you’ll need them all and then some before you know it.
More From GOBankingRates
- Housing Breaks That Are Available to Military Members and Their Families
- Everything You Need To Know About Taxes This Year
- 4 Tips for Saving Money While in the Military
- Big Personal Goals That You Should Put Your Money Toward