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Prepare your Finances for Baby

A baby is on the way and I can tell you from experience that it is a very exciting time! It is a time full of celebration, anxiety, stress and joy, a new baby can also bring unforeseen financial changes if you are not prepared. Here are a few tips to keep in mind when preparing for your newborn.

Medical Bills

Your medical bills do not start when your new baby arrives. Before baby you will have prenatal, delivery and postnatal expenses you will have to cover. Perhaps you decide to have a doula as well. If you do not have insurance to help offset these costs, the medical expenses could be higher. Depending on your insurance, your cost will vary depending on how much your insurance will pay and covered. Some states sponsor financial aid programs you may qualify for, so see what is available to you. 

Best course of action is to plan out your medical bills. Figure out what your financial plan is and how you plan on covering your planned and unplanned medical expenses.

Baby Stuff

Yes, Baby stuff. To welcome your new baby home there is of course the standard furniture that fills your baby items such as car seats, strollers, cribs, changing tables, jumpers, diapers and more. But the there are going to be the items you do not think of as well such as Tylenol, diaper creams, binkies, wraps, clothes, baby washing, burp cloths, wipes, nail clippers, thermometers and more. 

Is your child going to breast-feed? You will then need a breast pumps, bottles, nipples, storage bags and if you can store any extra, even the freezer space. Some insurances have programs to help purchase a breast pump so check your insurance might cover. 

If you your child is going to be fed formula, prices vary but keep in mind this is also a recurring cost as well.

Child Care

If you are lucky enough to have a parent stay home with your child, you are lucky. Even then, you will want to leave the home from time to time. You will most likely have baby sitter costs or even childcare.

If you are a working parent, there is childcare you might have to find to you can attend your job. Call around to find the best situation for you, your child, and your financial situation.

Control your costs

One thing I have learned of being a parent of 3 is not everything needs to be new. If you look around, I have learned, you can find used baby clothes that are in good shape. There are even stores that are dedicated to used high-quality baby products. Here are a few ideas that I have found that help control your costs.

  • Borrow baby products such as walkers, jumpers or chairs.
  • Not everything needs to be new
  • If you purchase something, pick something gender neutral so you can use it again if planning on another child
  • Wait for your baby shower if you are having one. You might get it as a gift
  • Do not follow stores baby shower lists. Those stores want you to buy everything. Your child will not be walking when they are born. Some items can wait when you really need it. 
  • Stick with essentials.

Protect your financial future

Start saving now

Have a new baby join your family is one of the greeting joys in life. One of the best actions you can do at once is start saving for your new arrival. It is best to have a bit of a nest egg ready.

Term Life Insurance

No one wants to think about ever needing life insurance. Having Term Life Insurance will not only help protect your new baby and your love ones in the worst case scenario. If you are young, it might surprise you how little per month.

529 Fund

Even though it is easy to forget in the chaos of a newborn, one day they will be grown and might seek higher education. Even if you cannot afford to pay for your child fully in the future, putting even $25 dollars a month away will compound over time and help in the future. Bonus, your state might offer tax incentives so look into your state’s 529 plan and any tax benefits they might offer.

Final thoughts

A new baby into your family might need a bit of smart financial planning. Once you have your plan in place, it will make your new normal with your larger family even that more exciting not having to worry.

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