7 Ways to Prepare Financially for a New Baby
A new baby on the way is always an exciting and celebratory time. However, a new baby can also be a huge financial challenge, especially if you don’t take the appropriate steps to prepare yourself. Here are some of our best tips when prepping for baby. Keep them in mind when sorting out your finances for your new arrival.
Common New Baby Expenses
These are the most common expenses that occur during pregnancy and within the first few years of your new baby’s life.
It’s a good idea to figure out ahead of time what your medical bills are going to look like. Things to take into consideration are things like your prenatal visits, delivery cost and postnatal expenses.
If you have medical insurance, check with them early if they offer any kind of new baby programs you can take advantage of. Some insurance companies offer free goods and services as incentives if you let them know you’re pregnant within in the first trimester and follow their prenatal checklist.
It’s also good to look over your insurance coverages to see what they will and will not cover. For example, most will cover a large portion of your prenatal visits with an OB-Gyn, but not with a midwife. Although, some companies will cover certain midwives.
If you don’t have insurance and are considered low income, many states have programs that can help minimize expenses and assist you with getting good medical coverage for you and your baby.
The important thing is to plan ahead of time. Depending on your insurance situation, you may need to have additional funds set aside for unexpected medical issues.
Here we’re talking about things like car seats, strollers, changing tables, cribs, bottles, clothes, diapers (2,700 just the first year!), rocking chair, swing, dresser, baby monitor, and more. Go out to your local store and price these items, or check online what the average ballpark is for these items.
This will help you get a good idea of how much money you’ll need to get the items you need.
Other things to consider:
If your breastfeeding will you need a breast pump? (Many insurance companies will cover one) Even if you plan on breastfeeding, you will still need a stash of bottles and nipples in case you ever do leave the house without your baby that first year.
If you plan on bottle feeding, make sure to factor in the cost of formula, and probably additional bottle supplies.
Another large expense: Childcare.
Will you need to find a daycare or babysitter? Start comparing costs of local child care centers, or figure out who will watch your child if you plan on going back to work.
Ways to Save Money on Baby & Lower Costs
Of course, saving money on your new baby is always a good thing. Here are easy tips that will save you a ton on your new little bundle.
Borrow or buy used
Babies outgrow things long before they wear them out. You shouldn’t have any problem finding quality used baby clothes, toys, and furniture. There are even stores that specialize in used baby items. You can also check on Craig’s List and local facebook garage sale groups. There is always new baby stuff circulating on facebook!
These used items are usually a fraction of the cost of new baby items.
When the time is right, tell everyone you know about your happy news. You’ll almost certainly be offered plenty of baby-related items.
Wait for the Baby Gifts
People can go crazy giving gifts when a baby is involved. You never know what you’re going to get. Wait until the dust settles before you start making purchases. The gifts you receive can be a real financial boon. Be patient so you don’t get stuck with two of the same thing.
What I did was create a baby gift registry on Amazon. I received many of the items off of my registry but also got several gift cards from my sweet co-workers. I was able to purchase the rest of my list with a 10% discount and used the gift cards to drastically lower the price.
Remember That You Don’t Need Everything
Your baby doesn’t require every gadget under the sun to be safe and happy. Ask the mothers you know what they consider to be the most important items.
Start Saving Now
You can never start saving too soon. Now is the time to eliminate all those things and services that you don’t really need. Sit down and look at your monthly bills and find ways you can cut back. Reduce your expenses as much as you need to so you can save enough money to be as comfortable as possible when the baby arrives.
Review your life insurance and will
Noone likes to think about this aspect of parenting, but what if something does happen to you. Who will take care of your child? Where will you money go? How will they be supported?
Sit down with the appropriate expert to ensure you have the proper insurance coverage when the baby arrives. Also be certain that your will is up to date.
Preparing for a new baby can be an exciting time. For the smoothest first year for you and your little one, remember to include financial preparations as well.