Five Smart Money Saving Tips for New Parents
Being a new parent can be a bit of a financial burden.
When I meet people who are experiencing their new bundle of joy, it’s not always the difficulty of getting up at 3am for feedings that is so difficult, sometimes it’s just adjusting to the cost of a new baby.
With this in mind, there are steps that you can undertake that will help you budget well for baby. Trust me, figuring out what your baby needs is something that you’ll have to discover as an couple, but before you start to really think on this, let’s take a look at five money saving tips that’ll help you financially.
Avoid the “Must Haves”
It’s amazing, there’s a plethora of stores out there, both online and brick and mortar that will convince you that you absolutely “must have” a certain item that they are hawking. If you need advice about those items that you’ll need for your new child/children, then talk to friends who’ve had a child or two; they’ll usually have excellent advice. While some of these must haves are okay from time to time, don’t back yourself into a corner financially when buying them.
There’s No Need for Customization
Its super tempting to get some of your baby’s things monogrammed, but while this is a great way to keep track of things, it’s absolutely terrible for passing them down. If your child’s name is stenciled or monogrammed on an object, it becomes increasingly harder to give the item to your next child, meaning you will have to buy another.
Throw Away When You Need To
While keeping things for a long time is a money-saver, you shouldn’t be afraid to throw things away either. As a rule, nothing lasts forever, especially considering how fast a newer and better version of a tried and true baby product can come along. If you need to upgrade because a new version is safer for your child, then do it guilt-free.
Grab Pre-Owned When You Can
Just as your friends are great sources of information for your baby, they are also potential owners of some great pre-owned baby gear. Tap into them for info and possible items that you can simply borrow or bought at a much lower price than what’s on the market today. Remember, kids only use many baby items for a month or two, so you’ll find no better trove of gently used baby stuff than from a friend with a baby who has outgrown them.
Think About the Future
This is a major one when it comes to financial practices, but let’s take a look at what you’ll need to do:
- Risk Protection – Always remember that your child will need to be looked after in the event of the unfortunate. Always set up a potential guardian for your child because, believe me, you don’t want the state to figure it all out. An estate attorney can help you protect and provide for your child under unfortunate circumstances.
- Future Preparation – College is only going to become more expensive, so start saving for your child’s future immediately and without delay. If you invest early, your money will have time to compound and grow. With just $200 dollar saved monthly when your child is born, you will have more than $30k saved by the time your baby reaches college age.
- Understand Health Insurance and Medical Costs – Let’s face it, your child is going to get sick, and when this inevitably happens, it’s important that you have the right level of coverage for your little one. You should ideally start preparation for this before your child is born, and it’s a good idea to find out if your employer offers a health Flexible Spending Account (FSA) that you can use to save up to $5,000 dollars in tax-free health care costs. Eventually, you can upgrade to a Dependent Care FSA that will help with childcare and pre-school.
- Don’t Forget Your Own Savings – While you’re focusing on saving for baby, don’t neglect your own retirement and savings for expenses. You’ll need to be able to be comfortable when it’s time for baby to go away to school, so whatever you do, help yourself before you think about college expenses or other savings.