The months or weeks that lead to parenthood is usually fun and exciting but it can also be the cause of financial worries. By now, you must have heard that babies can be expensive. You have another human being who is totally dependent on you in all aspects of their lives from what they wear to where they sleep. This means that you need to make realistic decisions when it comes to your finances.
To ensure that all your baby’s needs are catered to without getting drained, below are 6 ways which you can financially prepare for your bundle of joy.
1. Start Saving
Once you know you are expectant, start saving right away. With every paycheck that you receive, take a certain portion and put it in your baby’s savings account. Creating a baby fund will help you in purchasing various essentials. The saving’s account is also vital in case of emergencies during pregnancy, childbirth, and even after that. According to most financial advisers, your baby’s savings account should be opened at least six months before they are expected to arrive.
2. Look for Deals
Another great way of getting your finances right is by looking for deals. Note that baby stuff are really expensive. The tiny toys, clothes, shoes etc. can financially drain you. The good thing is that there are many online shops as well as retail centers that offer deals and discounts. Additionally, you can join a reputable baby registry to ensure that you get all the essential things that your baby needs at cost-friendly prices.
3. Prioritize What You Actually Need
If you have a baby on the way, it’s important to know that there are things that you will need immediately and others as they grow. Ensure that you prioritize what you actually need. Buy clothes, food, and essentials as per their importance. For instance, you need diapers, socks, vests, formula, bottles etc. from the onset while things like toys can be purchased later. Although diapers are expensive, you actually need them because newborns usually have frequent bowel movements. Create a budget and a list of all the essentials to help you prioritize what you need and control your expenses.
4. Consider Buying Gently Used Items
Babies usually grow very fast. On average, a newborn is set to gain at least one pound and grow one inch every month. This means that sometimes purchasing new items for them is unnecessary and a waste of money because they will quickly outgrow them. Apart from buying gently used items for my baby, I also took some hand-me-downs from family and friends. This helped me to save me money that I would otherwise have spent on new purchases. You can save your finances by looking for shops that resale clothes, shoes, changing table, high chair, toys etc. However, it’s important to note that everything isn’t safe for reuse e.g. crib mattress, breast pumps, car seat among others.
5. Clear Any Outstanding Debt
There is no better way to financially plan for your baby than getting your debts under control. The cost of having a newborn is already expensive and the last thing that should be stressing you is an outstanding debt which must be paid. If you have any debt, ensure that you pay for it before the baby arrives. This will help you get in a financially better margin. It will also make it easier for you to apply for a loan in case you have emergencies.
6. Get Life Insurance And Prepare A Will
When you are single or living as a couple but with no dependants, the last thing in your financial priorities is life insurance. However, if you are expecting a baby, this should be a trigger that you need to have a cover in place. Get life insurance that will pay you a tax-free income annually rather than a policy that offers a lump sum. It’s known as the family-income benefit which means that money will be paid out over the coming years and not in one go. On the other hand, wills are usually associated with old people. But the truth is that in life anything can happen. Should any unanticipated event occur, your baby will be protected if you have a will for your valuables.
Overall, preparing to get a baby is a fun yet demanding period. You are excited that you are finally going to meet your bundle of joy and at the same time worried if you have the right finances to sustain them. The above-mentioned tips will greatly help you to save your finances and ensure that your baby has everything that they need.