Congratulations! You’ve expecting a baby and you’re breathless with excitement — and nerves. A baby means big changes, and a part of those changes is lots of new expenses. How will you pay for it all?
We’ve got the tips you need to prepare financially for a new baby.
Pay down debt
Don’t let your debt grow along with the baby bump. It’s best to get your finances in order to make it easier to manage all new expenses and prepare for your child’s future. Make a plan today to kick that debt for good!
Adjust your monthly budget
Babies don’t come cheap. When your little one arrives, you’ll need to spring for baby gear and furniture, a new wardrobe, diapers, and possibly child care as well. Most of these expenses will be ongoing, so it’s best to make room in your budget for these new items before your baby is born.
Set up a baby account
All those baby expenses can be overwhelming, but if you break them down into bite-sized pieces, they’ll be easier to manage. Why not set up a separate savings account for all baby expenses? You can automate these savings by setting up a monthly transfer from your paycheck or checking account to your “baby account.”
Estimate prenatal care and delivery costs
It costs how much to have a baby?
Some folks can pay close to $10,000 in prenatal costs and delivery. Of course, these amounts do vary by location and insurance provider, but it’s a good idea to work out exactly how much it will cost you to have a baby so you aren’t in for an unpleasant surprise after the baby is born. Start saving now.
Start saving for college
Believe it or not, your little one will, one day, be all grown up and ready for college. This can mean paying a small fortune in tuition. The sooner you start saving for your child’s college education, the easier it will be to save. You’ll spread out the costs, and also give those savings the best chance at growth.
Consider opening a 529 plan before your child is born where your college savings can grow tax-free.