Preparing financially for the arrival of your baby isn’t just about buying tiny cute clothes or tonnes of diapers; these are very important too but it’s a lot more than that. It involves a whole lot of financial planning because the last thing you want to deal with when your baby arrives is financial stress. These five tips will help you prepare your budget so you can avoid being a financial mess and enjoy a good life with your new baby.
1. Check the state of your current finances. How much savings do you have? Do you have debts to pay off?
What assets do you currently have on ground? A financial assessment will help you set specific goals to achieve before and after the arrival of your baby.
2. Evaluate medical costs. Find out about how many doctor appointments you can expect to have during the first year along with all other medical expenses including prenatal care, delivery, newborn checkups, vaccinations and other medical bills that will follow.
3. Create a budget. This can be divided into a pre-baby budget and after baby budget. The pre-baby budget includes what you’ll need to pay for before delivery like prenatal care, the delivery itself, newborn wears, diapers, baby cots, etc. The post-delivery budget will be for recurring costs such as more diapers, bigger clothes, child care, extra food, etc. You might want to shop for used items to reduce cost great. Also, don’t forget to start or check your emergency fund.
4. Plan for your maternity/paternity leave. How long will your leave be and how much of your salary will you be paid? If you’ll be paid less than your normal salary, find a way to make up for it or try to adjust your budget.
5. Create specific savings accounts.
Keep your finances organized by opening separate accounts for the various financial plans you have. This should include your emergency funds, saving for education and other short and long-term savings.