As you look forward to life with your new baby, it’s time to prepare a new, or update your current, financial plan for your family. As your family grows, your budget will evolve, and starting with positive financial outlook will help you in the long run.
Develop a new spending plan
As you research what to buy in preparation of your new child, it’s easy to be overwhelmed with the lists of things and recommendations from friends and families. Try making a list of priority items and stick to your list. The top of your list should include a car seat, onesies, blankets and diapers. Also try to remember that some things are worth spending top-of-line prices while some things aren’t.
As you begin building your budget, here’s a list of items that will typically increase after you have a baby:
- Your grocery bill: Diapers and formula are very expensive. Later, when your baby begins eating solid food, you’ll have to figure in the cost of baby food.
- Your housing cost: You may find want to move to a larger home once your child, or children, get old enough to take up a lot of space with toys and equipment.
- Your transportation costs: If you have a small car or a two-seater, you may find it difficult to fit a car seat, and you may need to buy a new car. Or, if you own an older car, you may want to buy something more reliable now that you’ll be carrying precious cargo.
- Clothing and household expenses: You’ll find yourself spending less on yourself and more on your child now that your budget has to stretch. You’ll spend a lot initially to buy essentials for your child and then spend a bit more each month than you’re used to for items your child needs.
- Medical expenses: Unless you already have family coverage, your health insurance premium will likely increase as well as co-payments for each doctor’s visit. To be better prepared, speak with your insurance provider or your employer’s Human Resources department.
- Child care: Whether you’re looking for full-time day care or an occasional babysitter, you will need to plan for this new line item on your budget.
Saving for education
It’s wise to begin saving for your child’s education as early as possible.
You can begin by depositing a certain amount every month into a savings or money market account, contribute to a college savings account or take advantage of a wide variety of other savings or investment vehicles.
For assistance with building a budget or saving opportunities, contact one of our bankers today.