Expecting a baby and having one are major milestones in a couple’s life. It means, they’re on their way to parenthood.
Having a baby is of course, is one of the greatest joys in life. However, a baby comes along with a full package of responsibilities that you might not even have imagined.
To fulfill some of these responsibilities, you would definitely require extra money at hand. Therefore, financial planning is something important and necessary step to prepare for a baby financially.
Unfortunately, most would-be parents don’t do such financial planning. Hence, they might suddenly experience a shortage of money at hand to meet a baby’s needs when it’s born and as the child grows up.
Therefore, if you’re expecting a baby now, here’re some superb tips on how to do financial planning for the new arrival.
These tips can ease you into parenthood and literally take away the pangs of being a new parent.
Tips to Prepare for a Baby Financially
Most would-be parents will have some idea of what a new baby requires. And maybe, you’ve also bought some of these requirements such as a bassinette and other stuff for the baby.
But things don’t stop at that. To meet the growing needs of a baby, here’re some tips to do financial planning.
Get Your Budget Right
The first thing to do is get your budget right both before the baby arrives and for the time when it’s already born.
This means you would have to find what’re the pre-birth expenses as well as expenses on baby food and clothing.
Baby food and clothing would take away large amounts of money since neonates tend to grow fast. That means you’ll soon have to buy newer clothing for your baby and change the baby food to match the growing age.
Then there’re medical costs too for the baby such as regular check-ups from a pediatrician. Check if your health insurance covers these costs.
And if not, you could opt for new health insurance for the baby or get your plan modified.
Start Saving Money
As I mentioned earlier, you might suddenly find yourself spending a lot of money on baby requirements such as food, clothing, diapers, and medical needs.
Therefore, the best thing to do pre-birth is to start saving enough money. Actually, there’s no fixed amount that I can tell you about. All that I can say is that the more money you have, the better.
You can save more money by cutting down on unwanted or frivolous expenses.
Check your monthly expenses and you’ll definitely come across a lot of expenses that are not really needed, whether it’s dining out or buying new clothing for yourself.
Open a separate bank account if you feel so, to save the money for your yet-to-be-born child. Both parents can contribute a fixed amount of money every month to this account to ensure that a lot of funds accumulate.
It’s always better to have term life insurance when you’re starting a family. That way, you’ll be providing for the family just in case of any unpleasant happenings.
Also, get disability insurance because one can never tell when these would come in handy.
You might have group cover from your employers for life and disability. However, these could prove inadequate to cover a family in the event something happens to the main earning member.
Obviously., an insurance plan would cost you some money. Yet, it will provide some sort of security for your family and especially the newborn child, in case of any untoward incidences in your life.
Downsize Your Life
Unless you’ve full financial freedom and enough cash for the baby when it arrives, I would suggest that you downsize your life.
This can be done by doing away with some expensive habits. It’s quite likely that your spouse might not be able to work after having a baby. This directly translates as lesser income for the growing household.
Often, managing a household with just one active income can become a problem for many newborn parents.
Therefore, downsizing your life will help you adjust to the reduced household income for a small period of time, till your spouse begins earning again, if possible.
Downsizing your life isn’t easy. Therefore, you need to start practicing it now. That way, you can adjust to the lower-income easily.
Look for Sales and Bargains
You could talk with parents that have slightly older kids about what stuff you would require for the baby. And you can buy such stuff during sales and find online or offline bargains where possible.
You could also attend garage sales where you might come across some relatively new or even unused requirements for your baby.
You can land excellent bargains at such garage sales. Read community boards and classified ads to check if there’re any garage sales in your areas.
Sales and bargains can help you save a lot of money on baby requirements. Often, online retailers also offer baby requirements on sale frequently.
If such products aren’t nearing expiry or have no expiry dates, you could safely stock these at home.
As Other Parents for Help
And finally, ask other parents that have older kids for help in financial planning. At least some of them would have experience on how to do financial planning when they were expecting a baby.
Their experience and stories can provide you with some inspiration about how to save money and prepare for the new arrival.
If necessary, you can also enlist the help of a financial advisor to plan your money while expecting a baby.
A good financial advisor can help you with the right insurance plans and show you where to put the money you’re saving for the child so that it fetches the highest possible returns.
Happy parenting is also about being financially stable when you have a new baby. And this is possible only when you have a proper financial plan in place before the baby arrives. Therefore, it's necessary to start your financial planning while expecting a new baby, at the earliest possible.