Having a baby will change every facet of your life, including your finances. You might not have considered this change right away — you were too busy worrying about how to set up a car seat in your family car, how to build a nursery, and how to live on very little sleep instead. That’s fair!
To help you handle the financial side of parenting, you should read these tips as soon as you’re rested enough to get through them:
1. Adjust Your Budget
You can’t keep using the same budget that you had pre-baby. There are too many additional child-rearing expenses that will push the boundaries of that budget and make it untenable. For instance, your child will need diapers. On average, parents spend between $500-$900 on diapers for their baby’s first year. This average does not include diaper-related expenses like wipes, a changing table, or a diaper pail.
So, add child-rearing expenses to your budget and see how they mesh with your old categories. You will likely have to edit other categories to accommodate these new essentials. You can do this by shrinking variable expenses or eliminating non-essentials (for example, hobby spending).
You’ll want to have a budget that matches your current lifestyle, not one that matched your lifestyle a year ago.
2. Set Up a Safety Net
You’re already going to be busy, stressed, and sleep deprived as a new parent — the last thing you need is to deal with an emergency expense if you don’t have enough funds. That’s why you should set up an emergency fund for yourself. Check your monthly budget to see how much you can allocate to emergency savings every month and then automatically transfer that amount to your savings account.
With this safety net, you don’t have to panic when something goes wrong. If your kitchen sink clogs, you can pay a plumber to clear it without trouble. If your car stalls, you can call a tow truck and pay a mechanic to fix it. Knowing that you have a way to pay for these emergency expenses right away will give you some peace of mind. At the very least, it won’t add to your stress.
Without an emergency fund, you might not have an easy way to cover a surprise expense that falls into your lap. In that case, you could try to apply for a personal loan. A personal loan allows you to borrow what you need now and make repayments at a more convenient time. The repayment plan will be managed through a straightforward monthly billing cycle. So, you’ll pay the loan back a little later, until everything is covered.
3. Embrace the Hand-Me-Downs
Buying everything brand-new is not the savviest idea, especially when it comes to raising a baby. Babies grow out of clothes, toys, books, and equipment fairly quickly.
Another problem is that babies aren’t very careful with their things. They throw toys, rip books and soil their clothes with food, drool, and spit up. Spending your hard-earned cash on new items that are bound to be destroyed isn’t the wisest decision.
To save yourself money and frustration, get gently used baby items. Ask for hand-me-downs from other parents. Explore second-hand baby stores online. Join parenting groups that offer hand-me-down donations from other members. You can stock up on everything you need without spending a fortune.
Should you get everything second-hand for your baby? Not everything. You shouldn’t get pre-owned car seats, strollers or baby carriers. These should be new and meet the latest safety regulations.
Parenting is hard, and it will be a lot harder than it needs to be when you’re not adjusting your money habits. Make these simple changes and make your life easier!
