Welcoming a new child into the world is a wonderful milestone for any parent—especially if it’s your first baby. Once the initial excitement has waned, however, you might start thinking about some practical matters, such as finances. Having a kid means you’ll have to rethink how you manage your money, taking into account your little one’s current and future needs. This guide to finances for new parents can help you get a grasp on things, ensuring your family’s needs are met.
Make a list of “big ticket” expenses for the present and future
Knowing what pricey expenses you have ahead will allow you to save your money accordingly. For instance, as your family grows, you may want a bigger house. Various home loan options are available, and you can make a down payment as low as 3.5% or up to 20%. If you’re stressed about cash, look into down payment assistance programs. Another big-ticket purchase to think about is your child’s education. If you want to help put them through college, start saving. The average total cost of an in-state public college is $25,290.
Consider your day-to-day financial needs
In addition to these pricier big picture purchases, you also have to consider the smaller everyday financial needs of your family. Some essential baby costs include a bassinet, baby monitor, car seat, child care services, toys, and nursery furniture. There are also recurring expenses like food and diapers. According to Covered With Love Inc, one in three American families reports experiencing diaper needs. Luckily, there are charitable organizations like this one that can help.
Create a budget to help manage your money
Once you’ve created a list of all of your expenses, both small and large, it’s time to create a budget. This will help you manage your money, ensuring your needs are met without overspending. Valley provides a comprehensive guide to creating a family budget. For example, it’s helpful to organize your expenses into categories like utilities, discretionary spending, secured debt, and unsecured debt. This kind of organized and strategic approach will make it easier to stay on top of your finances.
Become an expert in finding online deals
Maintaining a family is expensive! You want to do all you can to cut costs. This is especially true if you’re living in a single-income household—for example, because only one partner works or you’re a single parent. The internet is a great place to save money. The Krazy Coupon Lady offers tips for parents looking to save on baby goods and provides helpful resources, from cash-back deals to online coupons. When you add up all of these discounts, they can make a significant difference.
Invest now to prepare for the future
When you have a baby to care for, it’s easy to get lost in the day-to-day details of the present. However, it’s also important to think about the future. Investing is one way you can prepare. Keeping your money in a savings account can backfire due to high inflation rates. Instead, look for ways to invest to secure your little one’s financial future. Options include tax-free junior ISAs and trusts. The money from such assets can help with costs like college down the road.
Use technology to stay on top of your money matters
Taking care of a baby and managing your family’s money is a lot to handle. Make things easier on yourself by using technology to help you with your finances. There are many apps and software tools that can support you with everything from creating budgets to tracking expenses. There are even expense-tracking apps that connect directly to your bank account, automatically logging your spending.
Having a baby is a blessing—but it also costs cash! Prepare yourself accordingly by following the above money management tips for parents.
For more content to help you manage your money as a parent, visit this resource hub.