A new baby on the way is always an exciting and celebratory time. However, a baby can also be a huge financial challenge, especially if you don't take the appropriate steps to prepare yourself. Keep these tips in mind when preparing your finances for the new arrival.
New Baby Expenses
1. Medical bills. Find out in advance what medical bills you're likely to incur. This would include prenatal, delivery, and postnatal expenses. Do you have insurance? How much will it pay? If you don't have insurance and have low income, your state has programs that will minimize the expense.
· Plan ahead. Depending on your insurance situation, you may want to have additional funds set aside for unforeseen medical issues.
2. Baby items. Here we're talking about things like car seats, strollers, changing tables, cribs, bottles, clothes, diapers (2,700 just the first year!), rocking chair, swing, dresser, baby monitor, and more. Go out to your local store and price these items.
· Are you going to breast-feed? You may need a breast pump if you plan on ever leaving the house without the baby. If you're not breastfeeding, you'll need bottles, nipples, and formula.
· Do you need daycare or a baby sitter? Call around to compare costs or ask a neighbor or friend what the going rate is for daycare in your area.
Lower Your Costs
1. Borrow and buy used. Babies outgrow things long before they wear them out. You shouldn't have any problem finding quality used baby clothes, toys, and furniture. There are even stores that specialize in used baby items. You can also check on Craig's List.
· These used items can be much less expensive than new stuff.
· When the time is right, tell everyone you know about your happy news. You’ll almost certainly be offered plenty of baby-related items.
2. Wait for gifts. People can go crazy giving gifts when a baby is involved. You never know what you're going to get. Wait until the dust settles before you start making purchases. The gifts you receive can be a real financial boon. Be patient so you don't get stuck with two of the same thing.
3. Remember that you don't need everything. Your baby doesn't require every gadget under the sun to be safe and happy. Ask the mothers you know what they consider to be the most important items.
4. Start saving now. You can never start saving too soon. Now is the time to eliminate all those things and services that you don't really need. Sit down and look at your monthly bills and find ways you can cut back. Reduce your expenses as much as you need to so you can save enough money to be as comfortable as possible when the baby arrives.
5. Review your life insurance and will. Sit down with the appropriate expert to ensure you have the proper insurance coverage when the baby arrives. Also be certain that your will is up to date.
Preparing for a new baby can be an exciting time. For the smoothest first year for you and your little one, remember to include financial preparations as well.