While babies are in every way our little bundles of joy, they also come with a hefty, but completely worth it, price tag. Between the doctor bills, growing out of clothes at an alarming rate, and the daily mountains of dirty diapers, the first year of your little one's life can put quite the dent in your wallet.
While babies are in every way our little bundles of joy, they also come with a hefty, but completely worth it, price tag. Between the doctor bills, growing out of clothes at an alarming rate, and the daily mountains of dirty diapers, the first year of your little one's life can put quite the dent in your wallet. Here is a list of six things to consider when financially preparing to grow your family.
1. Think Ahead
While you may not always have the opportunity to anticipate for your new arrival, it is a good idea to look ahead and figure out the answers to the hard questions. You, and your spouse, if applicable, should have solid answers to the parenting questions and financial questions. Especially when it comes to how your parenting choices will affect your finances. For example, will you stay home with baby or return to work as soon as you are able?
2. Budget and Save
While budgeting and building your savings are important in every stage of life, it becomes doubly important when considering starting a family. Prior to pregnancy, start looking at your finances and where you can cut back to add more to savings. Having an emergency fund is already great for when things go awry, like when your car breaks down, but that additional family member is also another person that can get sick and rack up expensive doctor bills.
3. Consider Life and Short Term Disability Insurance
If there's room in your budget for life insurance, it may be a good idea. You would want your child to be covered, if something were to ever happen to you. Prior to pregnancy, you may also want to look into whether or not your job offers short term disability insurance, so you can still get paid while on maternity leave. If not, you could consider outside STD insurance. However, keep in mind that you would want to look into this before getting pregnant, as there would be less of a chance to get covered for an existing pregnancy.
4. Save Specifically for your Hospital Bills
One of the costliest things that come with having a baby is the hospital bills. However, you can often save a pretty good percentage, whether or not you have health insurance, by paying a large portion of it upfront. Dedicating a portion of your savings to this purpose could allow you to both save money on the costs and avoid getting hounded by the hospital to pay after the fact.
5. Use Hand-Me-Downs and Shop Second Hand
Both of these will be your best friend when getting ready for a new baby. Before buying too much for yourself, see what hand-me-downs you can get from friends and family who are done having kids. Often you can find a ton of new or near-new baby clothes, etc. at consignment shops at a fraction of the cost.
6. Avoid Unnecessary Purchases
In reality, newborns need very little. Up through the first couple of years of their lives, babies can survive off the bare minimum amount of clothing and accessories, especially since they outgrow everything rapidly. Skip the furniture and large accessories that you will not need past a certain point. For example, a table/dresser top changing mat can be a fine replacement for an expensive changing table that you'll only use for a small amount of time. With as much laundry you'll be doing you don't need a year's worth of onesies, no matter how cute they are, and you definitely will not need more than a few blankets, pacifiers, etc. Other things you may be able to save on are formula, if you choose to breastfeed; baby food, if you make and freeze your own; and diapers, if you make the switch to cloth.
This is not a complete list of ways to save for a new baby, but hopefully it gives you an idea of the actions to take in preparation.
There are plenty of Mom-bloggers out there who cover these topics and more. Reading about the experiences of other Moms and Moms-to-be can be very helpful when it comes to your everyday questions as well as great ways to prepare for a baby, how to make a little extra money while you're not working, and sneaky ways to save a ton of money.
Here are a few good posts about saving, each of these bloggers also have an arsenal of great baby information on their websites: