How to Financially Prepare for a New Baby

How to Financially Prepare for a New Baby

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Congratulations, you’re having a baby! Adding a new member to the family is always an exciting experience, so make sure to enjoy the 9-month ride!

However, after the shock wears off, reality starts to sink in: you or your spouse won’t be able to work! No work means that your income will be lower for a while, and a lower income means that money will be tight! Or, perhaps, you both will still be able to work. Still, the idea of an extra person is something that you and your spouse are not prepared for!

Hang on, just calm down for a second. You’ve come to the right place. Here are a few things you can do right now to help you be better prepared financially when your bundle of joy arrives!

Don’t Put Too Much Pressure on Yourself

The most important thing you need to know about preparing for the arrival of a new baby is this: no matter how much you may prepare, you will never be 100% prepared. Not saying that you won’t have a plan – every parent has a plan – but certain things will come your way that you may not expect or plan. Heck, sometimes things don’t always go according to plan. But the most important thing to do is relax and to take it all in stride, both mentally and financially.

Find Out How Long You Can Take Off for Maternity Leave

One of the first things you want to do when you find out that you are pregnant is go to the company you work for and learn more about their policies. Do you get maternity leave? If so, how long? Is it paid or unpaid? All of these details matter, because they help determine your next moves as you plan.

Perform a Personal Audit

Babies are expensive, so saving is huge! One way to go about this is by performing a personal audit – go back the past 6 to 12 months and look over your expenses. Categorize your expenses under labels like bills, entertainment costs (shopping, movies, dinners), emergencies, etc. so you can see exactly where your money is going. You can even keep up with your current month-to-month expenses with money-tracking and saving apps. Also, take into consideration your insurance coverage and costs, including health insurance, dental coverage, and life insurance.  This practice will help you understand exactly what you spend your money on so you can understand where you can cut back to help save up for the baby.

READ MORE: 3 Benefits Of Children’s Life Insurance

Keep Emergencies in Mind

Having a baby is an exciting process, but it is also a critical one. Not only is the health of the baby important, but so is the health of the mother. Having something set aside for an emergency is always the wise way to go. What if the mother goes into labor earlier than expected? What if mother and baby have to stay in the hospital longer? What if the mother was supposed to have a natural birth, but wound up having to have a C-section? What if the baby has a medical condition that needs to be monitored? An emergency fund helps to cover all of these concerns, as well as give you peace of mind.

READ MORE: Hospital Indemnity Insurance

Don’t Buy Everything At Once

Parents – especially new parents – are notorious for this one! The idea that a baby is coming is already exciting, but it gets worse when you go into a store and see baby clothes or toys! These impulse buys are okay from time to time, but don’t go too crazy! You wouldn’t believe how much some first-time parents spend on items and clothing that their baby never gets to play with or wear! And, you never know, your baby may not even like that toy that you thought was so cute, or you may not use that specialized bottle maker that you thought was going to be so convenient.

Buy items and clothes slowly throughout the pregnancy so you can still be in control of your budget and spoil your baby at the same time. This will keep you from breaking the bank and buying unnecessary things that you know you won’t use later on.  Also, be sure to not go overboard so you can get the good stuff at your baby shower!

READ MORE: 3 Common Mistakes Parents Make When Saving For College

These are just a few tips that are sure to help you prepare for your upcoming arrival! If you still have questions or need help getting started, Bell & Associates offers budgeting and credit counseling services for FREE! Call or contact us today to schedule your appointment!

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