Managing Personal Finances for New Parents

Preparing your finances with a baby on the way is difficult to handle. You have to consider a lot of factors, and as new parents, you can’t help but to give (what you think is) the best for your baby. This isn’t necessarily a bad thing, but when your savings account is hemorrhaging dollars because of this habit, it’s a very alarming situation.

One of the main problems with parenthood is that you can’t learn it from a book or by someone’s lecture. It has to be experienced and it takes a bit of time before you find out your own parenting style. For the financial side, it can also be difficult to distinguish which products are essential and which ones are a waste of time and money. If you’re wondering where to start with your savings and purchases, here are some tips how you can manage your money before the baby comes.

Research Your Environment

Some baby-related expenses will be expensive or cheaper depending on your location so it’s important to know which places is good for your savings account. For example, day care costs can cost you as much as $1,500 a month depending on your area. If you compute that on a yearly figure, it might be cheaper to have one parent stay at home or work part time instead.

Aside from daycare, what you need to check is the availability and price of a local pediatrician. There might even be some pediatricians that are connected with your insurance company. This will save you money on check-ups and possibly, vaccinations. Nothing is worse than having to find a pediatrician for your sick baby and then finding out that the nearest one is in the next town or city.

Draft a Sample Budget

If this is your first child, then you’ll be at a serious disadvantage regarding budget forecasts. You don’t know how much you’ll have to pay for diapers or baby formulas you will have to buy on a weekly basis, and there are no hand-me-downs to stave off clothing costs. This doesn’t mean though that you should just forego planning a budget plan. It’s a very important reason for you to do this instead. A good rule of thumb is that if you’re not sure about a realistic cost you can try to overestimate it by a little.

Baby Products Warning

One frequent mistake of expecting parents when they go shopping for baby needs is to buy whatever seems convenient or “new” at that time. You should prioritize the needs of your baby the first few months or year. For example, buying a cradle will be more important compared to buying a crib intended for 3-4 years old. No matter how much you will save if you buy that crib now, you’ll save more if you postpone buying it for say, a few years. Here are some other tips that you can do to save on baby products.

  • Don’t buy baby designer clothes. Yes, it’s all the rage and people will look at your baby with envy. However, the reality of the situation is that your baby will always vomit on their clothes no matter what brand it is. They will also outgrow their clothes within a few months or even a year.
  • Mommy and Me classes are very tempting and may even seem like a status symbol. A cheaper alternative for this is to join a small playgroup or frequently meet with fellow parents who have children near your baby’s age.
  • Car seats that are specially designed for babies can be quite costly. Aside from being mandated by the law, these also protect your baby in case of accidents – a priceless value. If you want to save on this though, you can buy a baby “convertible” car seat. This will double as a car seat and allow you to carry your baby. It’s relatively lightweight, so you don’t have to pull a muscle just carrying your baby. These also last 2-3 years, so they provide value for your money.
  • For baby equipment that you won’t need forever (cribs, cradles, high chairs), you can find second hand items. There are a lot of garage sales or online ads out there if you are diligent in your search and search a few months before the baby is due.
  • If you’re going to buy baby products like diapers, choose to buy it in bulk. There are a lot of benefits in buying diapers in bulk. You’ll have a constant supply in your house, it doesn’t have an expiration date, and it will be much cheaper compared to buying it on a weekly basis or dashing to the store to buy one.

Choose to Breastfeed

Breastfeeding is always recommended by pediatricians and gynecologists for a lot of health reasons. It benefits the baby and the mother on a physical and emotional level. Mothers are able to recover faster, and create an emotional bond with the baby. For babies, they can acquire natural immunization from their mom and avoid health problems later on in life.

On a financial aspect, breastfeeding will also save at least $40 a week on formulas and bottles. When added up, it will run more or less $2,000 a year. That’s just for the regular infant formula. If your baby is allergic to the regular formula, you’ll have to purchase the hypoallergenic infant formulas which can be twice as expensive.

Provide Constant Interaction

A lot of toy companies advertise that your baby needs different kinds of stimulation to ensure proper growth. While that may be true, you don’t need to buy a lot of toys, mobiles, or activity centers for your baby. You can buy just a few simple or basic ones to keep the baby pre-occupied while you’re busy, but that’s it.

The best way to stimulate your baby’s senses is to interact and spend time with him. Playing with parents stimulates the baby’s walking, talking, and response to outside stimuli. A lot of studies have even backed this practice, as researchers found out that babies who spent a lot of time with their parents grew up to be emotionally stable and well-rounded adults.

Cash It in

Once your baby outgrows their equipment or toys, don’t be afraid to sell or trade it in. Of course, you should only consider this option when you’re not planning on adding another one to your kin. For used equipment, there are a lot of places you could sell or trade it in. There are consignment shops, pawn shops, or even online stores that will take it for a lesser price. If you find some expectant parents in your area, you might even sell it or trade it with something that you can really use at the moment.

Expecting a new baby is a very exciting period for new parents and the whole family. On the other hand, it can also be quite costly if not properly managed. Managing Personal Finances for New Parents focuses on using common sense and not being easily swayed by media or hype. Focusing on your priorities at hand will not only save you money, but also help you in raising your baby properly.