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Budgeting Tips for New Parents
The next installment in my budgeting series, budgeting tips for new parents, is a guest post by Jacob of Dollar Diligence. What happens to your budget when you have a child? Well, along with everything else in your life, it changes! Check out Jacob’s budgeting tips for new parents, and then make sure to check out the rest of the series linked at the bottom of the post.
Budgeting Changes You Must Make Once You Have a Child
Becoming a parent is one of the most incredible times in a person’s life. From the first moment that you see your son or daughter, your whole world changes. Your priorities instantly shift — including your financial goals.
Once you have a child, your budget necessarily changes in a number of ways. Let’s face it: baby gear is expensive, and children do not get any less costly as they get older. That is why it is so important that you start making budget changes to prepare for your child before you become a parent — and once your little one is safely in your arms.
Plan Ahead Your Expenses
First, you should start your budgetary changes with thinking about how you will pay for all of the new items that you will need for your baby. Although babies generally don’t need $1,000 strollers and $300 rockers, they will need certain basics.
From cribs to strollers to car seats to a place to change diapers, there are some necessities that every parent must have before their little bundle of love arrives. And for that reason, any expecting parent must start to budget for basic baby expenses before their baby arrives. Of course, many new parents are lucky, and the big ticket items — such as furniture, bedding and safety gear — will be provided by friends and family.
Other parents are smart and savvy shoppers and will be able to pick up these items at a discount at second hand stores or from friends whose kids have outgrown their gear. But even after the nursery is outfitted with the basics, there are still more expenses that will come your way. Whether you use cloth diaper or disposable diapers, breast feed or bottle feed, there are a lot of things that must be purchased for babies along the way.
When you are budgeting for a baby, be sure to factor in the cost of these items. Check out options such as local warehouse stores, Amazon Prime, and other online sellers to find to best price for these necessities.
If you or your partner plan to work once your baby is born, you should also include the cost of child care into your budget. Depending on where you live and the age of your child, this can be a significant expense, running upwards of $2,000 per month.
Plan WAY Ahead
Next, consider starting a college fund for your child. While it may seem early to put away money for college, the cost of a higher education is rising — and the best way to stay on top of these costs is to start saving early.
Putting away a small amount each month into a 529 Plan can help you put away a sizable chunk of the total cost of your child’s total tuition cost. If you wait until your child is older to start saving, you will have to save far more in order to save the same amount of money. By including the cost of a college savings contribution to your monthly budget, you will be helping to get your child started out in life with minimal debt.
Plan for Unexpected Emergencies
Finally, consider starting an emergency savings fund for any other expenses that may arise along the way. With children, anything can happen — and it can help to have a savings account to help cushion the financial blow of whatever comes your way. By putting aside some money each month towards a savings account, you can expect the unexpected.
Your child may need braces (that are not covered by insurance), or perhaps he or she will need a tutor to help them get ahead in reading. An emergency savings account can also serve as sort of a cushion in the event that you need to take off work if something should happen to your child.
By earmarking money each month for an emergency savings account, you can make sure that your child’s future is secure — and that you can handle anything that arises along the way.
There are few things in life that are more exciting — or rewarding — than having a child. Becoming a parent can be scary, but being prepared financially can help you feel more in control of the future.
By budgeting for baby expenses (including day care), setting aside money for college, and putting money aware for emergency expenses, you can be assured that your child will be well provided for at each stage of his or her life. While you can’t control everything that happens to your little one, you will be able to rest easy know that you have taken care of your son or daughter financially.
Jacob is a self-proclaimed personal finance enthusiast and blogger. Catch up with him @DollarDiligence!
Want more budgeting tips? How to start a budget, budgeting 101 for beginners is a great place to start. Already budgeting every month? Make sure to read two tips for successful budgeting (that no one talks about next. I hope you’re enjoying the budgeting series, make sure to subscribe to the newsletter for more money saving tips and tricks. Thanks again to Jacob for writing this post, make sure to check out what he’s doing over at Dollar Diligence and share this post if you enjoyed it.