A few decades ago, parents and kids had an almost transactional relationship. Parents would provide food, shelter, and protection and children would work and contribute economically to the family. Parents didn’t have to think about raising a baby on a budget.
It changed a few years later when we changed to the model of providing education, food, and clothing for the first 18 years of their lives, in the hope that we are doing all the right things to make them independent.
In the words of a sociologist, ” Kids are economically worthless but emotionally priceless.”
The knowledge about having a baby can bring a bag of mixed emotions. You are enveloped by happiness and blissfulness, but it is tinged with fear. Affording a baby is no mean matter in these times.
Babies are expensive and can mean a lifetime of expenses and investment.
This is the time parents ask themselves, “Is it possible to have a baby on a budget?”
Thankfully, you have almost nine to ten months of preparation before the big day. And yes- there are a few ways around it that will not only prepare you for the baby but hold you in good stead as a solid foundation for good financial habits.
Here are 7 golden tips to prepare for a baby on a budget:
Assess Your Financial Status
The first thing for you to consider is to assess your financial capabilities. Ask yourself if your finances are enough to cover your baby expenses. Through this assessment, you will be able to make necessary adjustments to your finances. You will also be able to set your goals based on your capabilities. Here’s a baby budget calculator to help you add them up.
Have an open talk with your partner( if you have one). Make sure that both of you will not keep financial secrets, and every potential financial decision is taken together.
Create a Budget Plan
Once you know your income, sources of income, and likely outlay of expenses, it is time to set your budgeting goals. When you create your goals, make sure that they are realistic and attainable. Start by setting some ways you can pay off your debts. Being debt-free makes it easier for you and your partner to achieve other essential goals.
After setting goals for your debt payment scheme, start planning how you will save up for your baby. Also, plan on how you can earn income that is enough to cover the expenses before and after your baby comes.
Create a budget that is about a month in advance. You can also start planning for your baby’s needs at this time.
When it comes to making a budget plan, don’t forget to include the health care provider you want to consult with for your prenatal healthcare and delivery. Check if your insurance can cover your pregnancy expenses. Make sure that your policy includes you and your baby.
Cut Back on Expenses
Now that a baby is on the way, you should take a hard look at your spending habits. Keep in mind that your lifestyle before pregnancy will be different now that you are becoming a parent. Lists things you think you do not need for you and your baby. And then, let go of them gradually.
This process may not be easy since some lifestyles and habits are difficult to let go of. Here’s a simple process to follow:
- List all the essentials.
- Then, rank them according to importance.
- Do the same when you are listing non-essentials as well.
- So, when there are extra on your budget, you can avail the first one on the list.
- Think of it as a reward for you and your partner.
- Open a Savings Account
Open a Baby Savings account
Since you still have at least 8-10 months before your big day, open up a savings account if you do not have one yet. Your savings account will help you stick to your financial goals. Make sure that you put a certain amount in it every month. If you are forgetful, you can set your account online, wherein a certain amount will be deducted automatically from your salary.
If you think you have the urge to use your savings on things other than your pregnancy needs, then try a bank account that is not easily accessible. If you are struggling with your income, which would make you strive hard for savings, try to look for other sources of income. Do some side hustles that will not pose any harm to you and your baby’s health.
You can also start looking for licensed loan providers, that can help you with emergency loans. A legit list of lenders will stave off panic in emergencies.
Plan for a Maternity Leave
Before you use up your maternity leave, make sure that you understand your company policies and laws. Getting in necessary insights about your maternity leave will help you decide on how long you would want to have your leave. You will also get an idea of how much you’ll need before the big day.
Many companies also offer paternity leave. Know the details to plan meticulously for the arrival of your baby. A big part of baby expenses is paying for a caretaker. Staggering either partner’s availability can bring down the cost to a large extent..
Prioritize Your Baby Necessities
You might get too excited about buying your baby’s things, but this is the time to defer to the list we made earlier. A good strategy that many couples follow is to buy baby stuff after the baby shower. By that time, some of the baby things on your list may have already been gifted to you. So, waiting for the baby shower can help you save money.
For instance, you can avoid buying shoes for a newborn. For any purchase, do factor in the fact that their growth is three times faster than an average growth rate.
You can also consider used buying cribs and baby furniture. Since these items are used for relatively short cycles, you can perhaps borrow from a friend or family.
Don’t delay paperwork
Preparing for parenthood means dealing with a little bureaucracy. Apply for your baby’s birth certificate, social security card, and other required documents required for travel, etc. Add your baby as a beneficiary to your health insurance.
Indeed, the preparation for parenthood takes a lot of your time and effort. This is because you are not only responsible for their wellbeing, but you have to be responsible for their financial needs as well, but with these golden tips- its definitely possible to prepare confidently for a baby on a budget.