Bringing a new life into the world is a miraculous accomplishment. You’ve waited nine months for this little person to come along, and while you waited, you kept busy, doing things in preparation for their arrival.
The majority of soon-to-be parents spend time baby-proofing their house, decorating, and shopping. It’s during the shopping, for the baby supplies and baby room decor, when you realize how expensive your newborn will be. Yes, you had the baby shower, and received all kinds of lovely gifts, but how long will they last? As your newborn growing child, then you will quickly go through your gifts, especially the clothes, as well as the diapers and wipes.
They’re so tiny and delicate when you bring them home, that it makes you wonder: how in the world do you go through so many supplies that fast? This can come as a big shock to new parents, but if you take the necessary steps and precautions, your financial journey into parenthood can be a breeze.
Whether you’re a first time parent, or eagerly awaiting your third baby, you want to be able to provide for them, and give them the best life possible. Doing that sometimes means you have to do whatever is necessary to be a provider of those necessities.
Having a newborn doesn’t have to put you in financial turmoil. You just have to be realistic with the expenses you’re going to take on, and proactively prepare for them. When preparing your finances for your newborn, here are a few areas that you will definitely need to take into consideration
New parents get a quick reality check on how preparing for a baby is much more expensive than they thought, and it gets more expensive as they get older. If you have a dollar amount in your head as to how much it will cost to take care of your newborn, multiply that times ten thousand!
The moment you find out that your family is expanding, you need to kick your baby preparation finances into gear immediately.
Let’s say both parents work. If either, or both, of the parents take time off, your income may possibly decrease, meanwhile the expenses continue to pour in. You also can’t forget about the baby’s big purchases such as a crib, stroller, and a car seat. Your newborn will go through diapers, clothes, food, and wipes so fast you’ll find yourself making several trips to the store.
If both parents return back to work, they may have to consider childcare services, if they don’t have close family or friends that can take care of the baby. Paying for childcare can definitely get very expensive, so it would be very helpful to consider your financial options.
To aid in expenses of a newborn, one route you can take is to look into personal loans. You might be thinking “why would I want to add a personal loan to the rest of my expenses?” Well, it’s definitely a safer option to have available to you when, or before the baby arrives.
It’s one of those things where, you’d hate to get in a situation where you needed a particular item for the baby, but didn’t have the money at that time to get it. Even if you decide to not go that route, you can at least track your credit score to see where you stand when, and if, you do decide to get that loan.
Savings Account/College Fund
College can be a great experience for your child, and can be a rewarding experience for parents. Saving for your child’s college education is something you also want to start as soon as you find out your family will be growing.
Investing in your child’s future can be quite expensive, with tuitions rising, but doing so will help ensure your child gets a job with decent income. That isn’t saying anything negative against those who did not go to college, but college graduates have better opportunities.
Saving for a college fund can be treated just like a regular savings account. You can open up a savings account specifically for you child’s college education, and have a percentage of your paycheck directly deposited into that account. It doesn’t have to be much, but enough to where that account will grow. I’d recommend anywhere from 5 to 10% of your monthly paycheck.
The help doesn’t have to end there either! College students also require books for classes. Books can get expensive, but nowhere near as expensive as tuition. You can usually take care of books with the swipe of a credit card. You can only pay for your child’s books per semester, so this gives you time to pay off your credit card balance during their semester. Once the new semester comes around, you’ll be ready to swipe again for the next batch of books.
Life and Health Insurance
Life and health insurance is an absolute necessity with a new baby. Health insurance covers all or part of the baby’s medical expenses. This is helpful to have when your baby goes for those monthly check-ups, or when prescriptions may be needed. Life insurance is when an insurer pays a beneficiary an amount of money when the insured person dies. Parents can obtain this type of coverage through their employer, or through their own personal insurer.
With life insurance, majority of the time, parents will list their spouse as the beneficiary, upon their passing. This will allow the living spouse to receive the payout amount, and in turn, be able to take care of the baby with that money as well. The thought of dying can be terrifying, no matter the circumstances, and it can be very uncomfortable to think about, but it is very important that you address it. This will help ensure you’re picking the best policy for you and your family’s needs.
Whether you’re opting for these insurances through a personal insurer or through your employer, be sure to check the different policy guidelines.