It almost goes without saying that “nothing changes your life like a baby”. Ask any young parents, and they will tell you this is 100% true. Having a child makes you suddenly entirely responsible for another person, which is the most significant responsibility. You are raising another person who requires much love, sacrifice, effort, patience, and money. While giving your baby enough love and care is the most important, you can not deny that it would all be impossible without money. That’s why many first want to be sure they are financially stable before committing to starting a family. Here are some simple guidelines to show you how to financially prepare for a baby so that you can relax and enjoy this incredible moment in your life once the day arrives.
How much are you spending now?
The first step you need to take is to figure out your monthly expenses now. Because once the baby arrives, those expenses will become more extensive, and it’s helpful to know your starting point. Be mindful of your spending for a month, and write down everything. Note how much you are spending on groceries. Then also write down how much you spend on dining out and delivery. Don’t forget to calculate the expenses on utilities and specific services like dry cleaning. In the end, add the money you spend on shopping, travel, and other things you do for pleasure. Once you add all that up, you will clearly see what you are currently spending.
Research the Baby’s Expenses
As with most things, figuring out how to financially prepare for a bay will also require some research. You need to learn what expenses you should expect once the baby arrives. Thankfully, all those pieces of information can now be found online. Like, for example, the prices of diapers. You can find out the average price of diapers in your city and calculate how much that would cost every month. Then don’t forget the baby clothes, pajamas, onesies, towels, washcloths, etc. Don’t forget that in some cases, you will also need to buy baby formula, which is entirely normal, but can be a little pricey. Then baby bottles, lotions, and if a doctor prescribed some baby vitamins. This is already a lot, and you will also need to add up more considerable expenses like a crib and a feeding chair. Do a little research and write down the prices of these things. This way, you will know what expenses you should expect.
Cutting Costs
Now that you know what your monthly expenses are currently and how much bigger they will get in the future, it’s time to start actually preparing. In this situation, cutting down costs is essential. Try to be more mindful of your spending because you need to start saving up immediately. Try and cut down on spending on dining out; instead, focus more on cooking at home. Also, in the months before having a baby, avoid splurging on big shopping sprees and traveling. Be mindful of how much you are spending on utilities. If you have big electricity bills, work on getting that number down. These simple changes can help you save some money before the new family member finally arrives.
Don’t Splurge on the Nursery
Expecting parents always want to make their baby’s nursery look amazing, so they spend a lot of money on decorating it. But this is not a smart financial move. It’s better to spend money on a few quality things instead of splurging on expensive décor. Your baby can survive without toys and expensive outfits, but it needs a good crib. When prepping the nursery, focus on making it spacious and functional. In this situation, you can benefit from storage. There are many reasons to rent storage before having a baby, but the main one is space. Most people will convert a room into a nursery and need to store things from that room somewhere to put the new baby things in. A storage unit is a practical yet affordable solution. Also, save some money by borrowing things from friends or family members. If they have a good-quality crib, they bought years ago, why not use that? The same goes for a feeding chair or a changing station.
Don’t Forget Your Health Insurance
Your health insurance will play a huge role in this whole process. Pregnancy is expensive, especially the birth itself, so you want to make sure your insurance covers it properly. And it’s best to deal with this as early as possible. The good news is that the Affordable Care Act considers pregnancy and childbirth to be a part of essential health benefits that should be covered by health insurance. However, some things will still depend on the insurance plan you have. Different health insurance plans cover your pregnancy and childbirth differently, and it’s good to research that on time. This includes inpatient and outpatient services, as well as newborn baby care. That way, you will know what expenses are covered and what expenses you should maybe expect to pay by yourself.
Financially Prepare for Baby by Creating an Emergency Fund
The only thing that’s certain in life is that it’s unpredictable. You never know what might happen in the future, so having an emergency fund set in place is always a smart choice. This is especially true once you are having a baby. It’s good to leave some money on the side in the months leading up to childbirth, just in case some unexpected expense arises. Maybe you will need some follow-up medical care or some other baby supplies, so having a fund like this can really put your mind at ease.
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