How to manage your finances when you have a baby on the way
Having a baby can be pretty exciting but also daunting, especially if it’s your first one! Take the financial stress out of the experience so that you can focus on what really matters – your new baby. A new baby can be a source of joy but can also cause some strain on the family’s finances. Depending on whether you are already pregnant, planning to get pregnant or adopting a new baby, here are a few ways to start preparing yourself financially.
Take stock of your current finances
Now is a good time to evaluate your spending power. Start by taking stock of all your finances by listing all your assets and debts including loans, credit cards and other liabilities. It’s important to be honest so you can determine how much you can realistically afford to spend on your baby.
Create a budget
A good way to start is by creating a list of all the items your baby will need. Ask friends who have recently had babies to help you generate a list of the essentials. Other costs you may incur include child care cost or reduced income if one parent needs to stay at home to look after the baby. Also consider the cost of time off- work for unpaid maternity leave, reduced pay if you decide to go part time after the baby, health insurance and pre/post-natal health care.
Further tips on how to afford the necessities of life for your new baby include:
Cut back on non-essentials: Now that you have a budget and a fair idea of how much you will need to care for your baby, it’s important to start saving by cutting back on non-essentials and luxuries.
The joy of expecting a new baby usually makes new parents and grandparents cut loose and spend excessively. Rather than changing tables and clothes, you can consider buying second hand. Accept carefully used ‘hand-me-downs’ from family and close friends, am sure your baby won’t mind. Safety items like car seats, strollers, cribs and high seats should be purchased new, to ensure that they conform to the latest safety standards.
A clever way to stretch your budget is to consider shopping in ‘off-season’ sales. Remember along with new babies come gifts; don’t be shy, let your close friends and family know exactly what you need help with. Now that the financial stuff is out of the way you can relax and look forward to the grand arrival of your new family member.