Financially Prepare for Your New Arrival
Congratulations! Your baby is on the way. Of course, you have all of your finances in order, right? The reality is that if everyone waited until their finances were perfect before having children, the world would be a significantly less populated place.
Like most everyone who has been in your shoes, you probably aren't exactly where you would like to be financially. But just remember, there's no time like the present to start making strategic choices with your money.
Here are some financial basics to consider while you get ready for your baby to arrive:
Really Look at Your Budget
Understanding what you earn, spend, and save each month is important at any point in your life, but with baby on the way, it just got even more important. Sit down with your partner and take a hard look at both incomes, and then consider how that total will be impacted after your baby is born. Not everyone has the benefit of paid maternity leave, so keep in mind how much income you'll be losing during that time. Even with paid maternity leave, the sudden increase in expenses can take a serious toll.
One way to anticipate how much you'll be spending is to price out the cost for infant necessities. Take a non-buying trip to the store and tally up the cost of the basics, like diapers, wipes, breastfeeding accessories, or formula. Anticipate that your utility costs will go up since someone will be home all day with the baby, at least during the first few months. You may also wish to establish a clear understanding for the actual cost of childcare.
One of the best ways to get an idea of the true impact of a baby on your budget is to talk to friends with new babies. They'll have the most up-to-date information as well as plenty of tips for finding ways to be smart about those expenses.
Start Saving Now
If you aren't putting anything toward savings at this point, now is the time to start. If you already save, try to find ways to cut back so you can start saving more. While this may seem like a serious challenge, particularly with all the impending expenses that come with having a baby, it's very important to slow down, assess your budget, and determine where you can save before you start spending.
The pressure to spend is strong. But, keep in mind that while the desire to give your baby the best life possible may initially make you want to buy the newest, best, and most expensive gear available, these things won't keep your baby secure. Investing in your financial future is the ultimate way to ensure your baby's needs in the long run. Cutting back on spending now translates into less money-related stress later. It can also mean the difference between a short or more extended maternity leave, and can possibly leave you with some extra cash to seed long-term financial goals.
