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Are you expecting a child? Is your baby due in a few months? Congratulations! But wait! Having a baby is a huge financial responsibility. Are you ready for it? If not, keep reading this blog post; you will find some valuable tips to prepare for a baby financially.
Watching a child growing up is a genuine satisfaction but thinking about the expenses is quite terrifying. It comes to spending a hefty amount in raising a little human. In 2017, the US Department of Agriculture reported, it costs about $233,610 to raise a child from birth to the age of 17. However, the census of 2020 shows that for the delivery of a baby, the required expenses are around $10,800, in case you have no health insurance.
So prioritize your personal finance before adding a new member to your family. Here we have penned down some practical tips that can soften your financial blow of having a baby.
Comprehensively review your insurance.
Before growing your family, review the health insurance policy. Currently, if you are busy in your job, and can’t go to the insurance company’s office, book a call to the company and talk to the insurance provider in detail.
Moreso, ensure that your policy has the right amount of coverage to meet your hefty expenses. If you think you won’t have much money to continue your insurance, Go for the low packages. I assure you the insurance will provide you with priceless happiness and peace of mind.
Remember with a new addition in your family; the living expenses will raise.
Try to tackle your debts.
Do you and your spouse have to pay any debts, and you got sick with baby fever? Of course, having a child is going to increase your debt. Try to pay off all your debts or try to keep them under your control. Because having a child in your debt-free family can make it a lot easier for you to raise him/her well. Controlling your debts will also minimize your financial damage and will lead to a peaceful life.
Sandberg believes that giving birth to a child without tackling debit card debts is like starting a business without a proper business plan.
Prepare a budget
With a child’s birth, you will experience a sudden drop in income, so be prepared for it. Track your expenses to increase your bank balance, like cutting back your money from spending on entertainment or dinners.
Prepare your budget properly because as you get your infant, you will need to pay a lot of money for either his/her birthday or diapers. You may have to invest in buying formula milk and have to put it in the child care center. Moreover, if you live on just one salary, talk to your husband and build up some savings.
Start a baby saving account.
Like most people, you must be thinking, what’s why to open a baby saving account? Well, considering a separate saving account will help you in the long runway. If you stock away even only $10 to $15 per week, the growth will be wonderful.
With these saving, you can easily meet the additional expenses of a child-like payment for the furniture, car seats, and child care. Several banks offer you to open your baby’s account even without a birth certificate.
529 plan for kid’s future
The savings for college education can’t be ignored. It’s better to make savings for the college expenses sooner. For this, a 529 plan is the better choice. It’s a special saving account for a child’s educational expenses, like tuition fees, computers, meal plans, etc.; this account also provides tax advantages. It can increase your money rapidly as compared to regular accounts.
As a parent, you can open a plan with your name, being a beneficiary. As the child is born, the name of the beneficiary can be changed. So the 529 plan is flexible.
Search for daycare
Before having a baby, it’s better both the partners sit together and discuss the daycare. Ask your spouse if she will stay with the kids at home, or you have to consider the daycare. Your financial status will be affected in both cases if you go for the daycare, research for them, and mentally be prepared for the drastic economic changes.
Don’t get crazy over baby equipment.
Are you going to spend a lot in the excitement of a newcomer? Hold off from collecting unnecessary baby equipment.
In their craze and happiness, many couples equip their house with baby items that are of no use. Like they buy many expensive toys, night lights, and branded clothes. Please don’t do this because it will increase your burden and stress. Buy the essential and must-have equipment like a car seat. It has been found that most of the parents with their first child buy at least one extra piece of every piece of equipment that remains untouched.
Calculate the maternity/paternity pay
So for how long have you been providing your services to the company? If it’s more than 26 weeks and you are paid a certain amount, you will be entitled to receive paternity or maternity pay. Contact your HR department and find out what’s the company scheme. It might help you to improve your financial status.
Having a child is a real blessing, but you may feel a weight of responsibilities on your shoulder. For raising him/her in this digital and modern world, you need to be financially strong and stable. Pay attention to your financial wellbeing and fulfill your responsibilities in a much better manner.
By the moment you conceive your child, start looking at your finances. It is crucial for a safe and stress-free family environment. If you have found these tips practical on how to prepare financially For A baby, share your experience with us in the comments section below.