Top Ten Ways To Include A New Baby In Your Budget
There is no doubt about the fact that having a baby is expensive. Some estimates show that even just the first two years, you might end up spending an extra $16,000 just in food, clothing, health care, and more. If you’ve been struggling managing a budget with just two people, it can come as a shock to learn that the pint-size version of you has to have a bigger share of the budget pie than you might expect. Before the actual event, it’s a good thing to take a cold, hard, look at how to build a realistic budget and find out where you can make adjustments and how to position yourself to not only afford the new addition to your family, but also to enjoy your new life as parents.
10: Reduce Debt In The Family
You want to pay off as much debt as possible before you have a baby. This will not only increase your ability to incur the additional expenses, but also frees up credit should you need it later. Increase your monthly payments, use your tax return to pay off credit cards, car loans, or other types of consumer debt. Breathe easier.
9: Release The Keep Up With Joneses Mentality
No, your baby really doesn’t need designer binkies or custom-crafted baby cribs. Hand-me-down clothing is actually a very smart move for youngsters that tend to outgrow an outfit before it gets worn or spoiled. If you have the option, get some of your baby shopping done through your network of relatives and friends who may already have much of what you need stashed in their garages or basements.
8: Increase Your Savings
Along with reducing debt, increasing savings is a key way to go through this experience with some level of comfort. If your spouse plans to take unpaid leave or quit a job, you also need to take that into account when you plan a budget.
7: Project Baby Expenses
Add the columns for new expenses, like health care, baby wellness visits, diapers, food, baby sitting, and any other expense you can foresee due to the baby. If you have special concerns like cloth diapering due to green values, you want to realize how much time and effort laundering is going to take when you do it yourself versus how much it costs to have someone else do it for you.
6: Review Your Insurance Needs
You may want to increase your health coverage, add some more life or disability insurance to your portfolio. Talk to your insurance agent to see what types of coverage you now need to insure the family in the event of the death of a breadwinner.
5: Negotiate Your Pregnancy And Baby Health Costs
Shop around for health coverage that is going to cover what you need and that fits into your budget. Pay close attention to the types of pediatric and obstetric services provided in the network and what your co-pays or deductibles might be.
4: Plan For Future Financials
It’s not to early to consider a college savings plan or to buy bonds that mature when they’re ready to attend college. Maybe you want to have enough money for a car when they graduate high school. That needs to be planned out.
3: Be Prepared For Temptations
Marketers know that all parents want the best for their babies, and they will do everything they can to tempt you into buying things you really don’t need. As your child grows, if they watch any amount of television, you can expect that pressure to increase as they start to ask for toys and electronics. You need to be prepared to hold your line on what’s an acceptable splurge and what can be done without.
2: Get Ready For The Parties
While you were pregnant, you probably enjoyed a baby shower courtesy of your friends. What you might not expect now, are surprise invitations to other baby showers, birthdays, and christenings. Start a gift closet where you put bows, gift bags, paper, and small gifts bought on discount after special holidays. If you happen to be a great cook, offer to bake something as a further way to reduce your meal expenses.
1: Understand You Can’t Control All Expenses
Children have a way of ruining a budget, whether it’s due to new braces, a broken leg, or a class trip. You won’t be able to control all surprise expenses, but you can see how they’ve impacted your budget and this gives you a tool to recoup the expenses later. Being able to accept the inevitable expenses as part of life goes a long way to reducing the financial stress associated with child-rearing.
This entry was posted on Monday, December 14th, 2009 at 3:42 pm and is filed under Kids and Family. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
