The excitement which comes with the arrival of a baby is an unparalleled joy for any new parents. Whether you are about expecting your first baby or have recently welcomed a new addition into your family, there are certain tips you must keep in mind which will help your financial health to remain in pristine condition. From a purely financial point of view, a new baby means an extra cost, and as new parents, it is imperative that you know how to manage your finances to make sure this happy time of your life is a financially stable one as well. Here are 9 tips that new parents must keep in mind when expecting a new addition to the family:
1. Be Aware of Maternity Leave
While most employers do offer maternity leave, not many employers offer paid maternity leave. For this reason you must set aside funds before the arrival of your baby to help you during the time when you are on maternity leave.
2. Reduce Luxury Expenses
Welcoming a baby into your life will mean rethinking purchases that you are accustomed to, especially if they don’t add much value to your life. When you become a parent, you are forced to focus on those expenditures which you may not have thought about in the past. For example, simply switching from the daily cappuccino that you buy from your local coffee shop and instead making your own coffee at home, can save you a large amount over the course of several months. Eating out is another expenditure which, if reduced, can save you a lot. Do you really need that second car? Or the extra large LCD television? Scaling back your spending on unnecessary items will benefit your bank account greatly.
3. Hidden Deals
Several large brands offer a points system or offer vouchers that can help you cut expenditures. Keep your eyes on the social media accounts of all the big brands to see how you can avail freebies online. Some brands focus especially on new parents and babies, sometimes offering loyalty programs with free items available with certain purchases. You may be surprised to see how many money saving offers are available online if you only look in the right places.
4. Set Financial Goals
As new parents, you want to set financial goals that you will work towards. Whether it’s saving towards your mortgage, a retirement plan or saving for your child’s college education, it’s important that you discuss your goals regularly. Obviously, saving means prioritizing and this may mean putting certain financial goals on hold and focusing on those which are imperative in the present. Take actions according to what is most comfortable for your family.
5. Budget and Track
To reflect your new lifestyle with a baby as part of your family, you may need to come up with a realistic budget to reflect your increased spending. Most likely your household expenditures will have increased to accommodate the cost of raising a baby. Even looking into how to delete charge offs from credit report can help lower interest rates on bills you already have. Create a monthly budget to reflect any new expenditures. It may take a few rounds of trial and error to come up with an accurate budget but eventually you will find that you are able to stick to your budget. By tracking your spending, you can see if your money is going towards those items you want it to or if it’s going astray towards wasteful activities and products. Tracking your spending can be an eye-opener.
6. Emergency Finances
Always keep money aside for an emergency such as a medical emergency. If you are expecting a baby, it would be wise to put aside three to six month’s worth of living expenditure aside for unforeseen emergencies which may not be covered by insurance or if the mother is unable to rejoin the workforce when she planned to. It would also be a good idea to be informed about life insurance if you are becoming a parent for the first time.
7. Gender-neutral Clothing
If the baby hasn’t yet been born and you don’t know the gender, buy clothes that can be worn by both boys or girls. An added benefit of buying gender-neutral clothing is that the clothes can be used by any children you might have in the future, regardless of gender. This strategy will save you a lot if applied when purchasing strollers, car seats and high chairs as well.
8. Skip Nursing Clothes
You don’t have to buy specialized clothing even if you plan on breastfeeding. A combination of simple tank tops, zip-up hoodies and scarves are just as practical as costly clothes aimed at breastfeeding mothers.
9. Buy Clothes with Room
Since babies tend to grow very fast, invest in clothing that is one size too big as this will allow your rapidly growing baby to grow into their clothes and will be a better investment than clothes which will become too small in a short timespan. A fun and cost-effective alternative is to organize a clothes swap for gently used clothing if you have friends whose children are around the same age as your own child.
While welcoming a new addition to your family is a happy occasion for everyone involved, it is also easy to get swept up in celebrations and excitement, while forgetting some of the most important points. Financial planning is of great importance when expecting a baby and with these tips and tricks, it will be easy to stay on top of expenses and welcome your child into a happy, well organized family.