It’s easy to get excited about picking out a bassinet and selecting the color scheme for your new baby’s nursery, but you have far more important things to worry about before you bring a new baby home. Babies are fun to play with and will deprive you of sleep for months if not years, but they will also drain your bank account if you do not prepare financially for this major life change. While money issues are stressful, there are a few things you can do before your baby is born to relieve some of the stress sure to come.
1. Adjust your lifestyle to your expected income.
If mommy-to-be is a primary wage earner for the family, how will the household income change during maternity leave and after the baby is born? Check into the maternity leave benefits offered by your employer so that you know what you will bring into the family while you are away from work.
If you do not plan to return to work after having the baby, then a major shakeup will occur in your family’s finances. Right now is the time to cut back on expenses and make sure that you can live on what income will remain. If you cannot afford to stay home without earning money, explore freelance opportunities that you can complete from home.
2. Cut out unnecessary expenses and get serious about your budget.
If you weren’t motivated to take your budget seriously before, use your baby as inspiration. Financial security depends on healthy budgeting, and your baby deserves security. Go over your budget and remove all unnecessary expenses first. For example, you may decide to make your morning coffee at home rather than buying the high-dollar latte on your way to work each morning. Think of it as trading coffee for diapers.
Calculate your total income and determine a livable budget. Every member of the household must live according to this budget so that you know where your money is spent. Keep the next tip on this list in mind as you create this budget.
3. Think ahead for the expenses that are destined to hit your bank account.
The money you spend on your baby will go far beyond buying diapers and bottles. You will also need to invest in a college fund for your new baby, and you may want to start a savings account in their name as well. If your baby has medical issues, you can easily spend thousands of dollars each year on co-pays. Of course, you may pay more for your medical coverage if you need to switch from an individual or couple policy to a family policy.
How do you plan for these expenses? You can get information on savings plans right now and get the funds started. You should also build extra savings into your budget so that you are putting money away for those unexpected future expenses.
As you start shopping for the smaller items like strollers, car seats, steam mops and carpet cleaners (to clean up those messes that your baby surely will leave all around your house), give yourself time to compare features and read reviews online. It’s not always wise to buy the cheapest products. Don’t disregard quality altogether, as you may regret it a few months down the road when you have to buy a new “insert product here” to replace the one that you had to throw in the trash.
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