It can be a bit overwhelming being a first time parent; however, it can be exciting as well. Although your little one might be cute as a button, the expenses that you will incur for this little one will be challenging to deal with. There are many things to consider and prepare for such as your baby's food, milk, diapers, health expenses, clothes, vaccinations, toys and more. Starting to save now is important. Below are five tips for new parents that can be taken now to begin your financial planning to help raise your new baby.
Budget Mindset
First, you should start right away to get into a budget mindset. You need to realize that you will have a financial commitment once your little one comes into the world, so getting into that mindset and beginning your financial planning now is key. Pay a visit to your local department store or grocery store to get an idea on how much diapers will cost, as well as baby wipes and formula. You will begin to understand quickly how saving a few extra bucks each month can help to keep up with just the basics. You can also contemplate on areas where you can improvise such as buying generic formula or cloth diapers.
Life Insurance
Life insurance might not be on the forefront of your mind, however it is important and suggested for women prior to getting pregnant in the early stages of their pregnancy. This insurance will pay a certain sum of money in the event of your death within a specific term, such as 20 years, and is typically the most efficient plan. Having coverage before and while you are pregnant is a good idea in case of any unfortunate events that could happen during birth. You do not want to leave a financial burden on your family or your kids to deal with later on.
Health Insurance
Again, this type of plan is something to definitely think of before getting pregnant or at least the moment you find out you are expecting as you will definitely start racking up the maternity costs. You should also inquire about any out-of-pocket costs so you are not surprised later on. Generally, you can add your newborn to your plan within 30 days of birth, which is most likely the time where you will be most sleep-deprived. Therefore, planning for this type of coverage ahead of time is best.
Be Practical with Spending
There is nothing wrong with a few shopping tips for saving money. When you are out shopping looking to make a purchase for your child, take the time to explore other alternatives. You can always find other items available that come with a more affordable price tag and are made of the same quality. Buying second hand items like baby bath tubs, cribs or strollers can also be a good idea.
Plan Ahead
Waiting to plan for college until your child gets older can end up being too late. A public college's tuition costs and fees for the 2009-10 school years, according to the College Board, was $7,020 and was $26,273 for private college. By planning for college expenses early and taking advantage of tax-free savings and compounding interest, you can eliminate some of the burden of college expenses for your children. Search for ways to save extra income for this investment early on. Even asking for the help of family members and grandparents to donate funds to this cause can be a big help.
In addition to having a financial savings plan, you do need to keep on top of your credit rating. Down the road, you will most likely want to buy a new home, new car or help with loans for your child's education. It is important to monitor your credit scores regularly to make sure your credit is where it needs to be to get approved for credit for these types of things. Perform a credit check at least once a year to ensure you are in good standing.
Remember, once the baby arrives, it will take up most of your time. Remembering the times before your little one was born can get difficult; especially if you are trying to keep the love going in your relationship with your spouse or partner. Therefore, it is important to budget in a little extra spending money for date nights as well to keep your partnership strong, especially during the happiest and most stressful times in your lives. Being a new parent is challenging, but financially planning for your new family is important. However, saving to keep your family strong and happy is just as important.