Even in the most ordinary circumstances (read: not during a global pandemic), preparing for a baby can be a stressful task. Especially when you consider how to prepare for a baby financially. But don’t worry, and take a deep breath. There are some things you can do ahead of time. Saving yourself the stress and giving your family peace of mind.
Tally up your current and projected expenses
Budgeting can be a financial lifesaver––and is a habit you want to keep your entire life. When budgeting for your growing family, add up your current and projected expenses. You could track this on a Google spreadsheet or a budgeting app, as long as you are tracking somewhere that can be easily updated.
By breaking down expenses into current and projected, you can adjust as necessary. Are there other areas you need to cut (maybe those miscellaneous purchases)? Some standard pre- and post-natal expenses include ultrasounds and lab work, baby essentials, delivery expenses (“a regular delivery in the United States averages out at $6,598”), baby food, childcare, and diapers. Lots of diapers. But planning for these items now with cost estimates will keep you from getting blindsided. And allow you to make adjustments where they’re needed.
Work toward eliminating debt
Recent statistics show that “middle-class American parents spend an average of $233,610 to raise a child from birth to age 17.” And this figure doesn’t include the cost of college either. Cutting down on existing debts is one way to prepare for a baby financially. Lowering or eliminating your monthly payments can give you a little room in your budget to plan for future expenses. One option to help ease credit card debt is a balance transfer.
Figure out maternity/paternity leave
Maternity and paternity leave vary by workplace and location. Before your baby is due, have a conversation with your boss about whether they offer paid leave and how much time you can take off. It’s important to “understand your company’s policies and your state’s laws to get an accurate picture of how your maternity leave will affect your bottom line.”
If your company does not offer paid leave, be sure to factor this unpaid time into your budget as well.
Start a college fund or savings plan
It’s truly never too early to start planning for your child’s future. By starting a college fund or a savings plan right away, you are guaranteeing a sum you can use down the road. Creating a savings plan for your child through DEXSTA also means you “ensure that the money you’ve set aside for your new child goes towards those expenses and doesn’t get absorbed by another expense, like an emergency fund or home repair budget.”
Getting a head start
Preparing financially for a baby can be overwhelming at first. But following these tips can help ease some of the stress and free your mind for equally important considerations––like what to name your baby. (Sorry, not our area of expertise).