Proven Finance Tips for New Parents
Welcoming a baby into the world is a reason for joy but, for many new parents, this also comes with a whole new set of concerns surrounding health, education and finances.
Fortunately, when it comes to money, there are several things you can do ahead of time to cushion the blow. There are also ways to plan, save and set up a financial budget after the baby comes, and most of the advice below can and should turn into a healthy habit for years to come.
So, if you want to feel comfortable and successful in your new roles as parents, here’s what you can do in the months prior to birth.
Pre-Baby Budgeting Tips
- Cut down credit card debt and start tracking your spending in a budget tracking app or a regular spreadsheet. See what your expenses are pre-baby so that you can, later on, create and adjust a proper budget.
- Order a credit report if you haven’t already done this in the past year, and make sure you have a good credit score.
- Start drafting the budget and remember that the goal is not to break even, but to set money aside on a regular basis. Also, take into account that raising a child to adulthood — college expenses aside — is about $267,233 as of 2021.
- Get updated information on maternity or paternity benefits from your HR department, and be prepared to cover the potential gap of unpaid leave. Make sure to add the baby to your health insurance policy.
- Evaluate childcare options and always check references to make sure you make the best choice, both education-wise and financially.
- Buy life insurance, preferably 20 years or less. It is also a good time to write a will and appoint a guardian. Take into account lawyer fees for drafting the will.
The Essential Aspect Nobody Mentions
In the hustle and bustle of adapting your life and budget to the incoming bundle of joy, it’s very easy to overlook a crucial aspect: online security. With cybercrime on the rise, now more than ever you have to prioritize securing your financial information online, as well as other personal information.
For that, you need to have in place reliable security and identity theft prevention measures on all devices connected to the internet where you access financial accounts or make online payments.
Choose a LifeLock package suited to your needs and leave these worries behind. You will get alerts on your identity and Social Security number, you will benefit from credit monitoring and you will be able to secure a minimum of five devices.
How to Save Money Once the Baby Comes
- See what your friends and extended family can contribute from their previous newborn experiences and stick to buying the essentials. Keep in mind that spending more money doesn’t guarantee better quality, so do your research before buying expensive items like a stroller, crib or highchair.
- Buy diapers in bulk or, better yet, opt for reusable ones. Helping the environment can also help your wallet.
- Look for discount codes and join parenting clubs that offer freebies and tips for buying cheaper products.
- Stay clear of products labeled “for pregnancy.” It’s just a marketing trick to make you pay more for the same item.
- Plan meals for a week and buy larger pack sizes. This also helps manage your time and energy better, and we all know how these take a hit around babies and toddlers.
Now that you are more confident and knowledgeable about how you can start on a successful financial path as new parents, game on.