If you normally consider budgeting to be a boring task, things will have to change when you have a baby. While having a baby is very exciting as a couple, it can have a big impact on your household income and expenses. You may be a two-income couple struggling to save money and wondering how you’ll manage when you have an extra income and an extra mouth to feed. The good news is that regardless of your income, you can make some smart decisions to make a baby more affordable and leave you with fewer financial worries so you can focus on important things like your new baby.
Calculate your current living costs: The initial step in budgeting is to list all the expenses that make up your costs of living right now, without your baby. Make sure all expenses are included. The monthly bills you pay regularly are often the easiest place to start: rent or mortgage, car, groceries, electricity, water, phone, cable, Internet, gas, membership dues, etc. Once these amounts are written down, start listing expenses on other things. It doesn’t matter how small the expense is: these little things add up. Summarize your total spending each month.
Establish your income: You will want to know your total household income. It should be easy to determine all the money coming into your bank account. Subtract your expenses from your income and the rest will be your baby budget. A baby may need about $800 a month or almost $10,000 during the first year of life. Do you have enough money left over? It is also important to consider income differences before and after birth. If you have a two-income household, there may be a loss of income when the mother has to take time off to care for the baby. You will need to decide the length of that period.
Cut unnecessary expenses: If your baby budget is not enough, look for items that can be eliminated, especially non-essential expenses. Many people spend almost a third of their monthly income just on dining out. Saving money on this item will be a great help.
*Prepare a lunch. Cook at home instead of dining out. Make coffee every morning instead of buying it at the coffee shop.
* Fruitful areas to cut back are usually Internet, phone and cable services. Downgrade your cable package to a lower cost package. Does it really matter much if it takes a few minutes longer to connect to the Internet? There could be a difference of $15 to $30 in monthly rates. If you can reduce the functions of these three services to the essential needs, you could save up to $100 a month; That’s $1,200 a year.
* Consider switching to more fuel-efficient cars (but make sure they are kid-friendly). Driving a smaller, more efficient car can save money on fuel, loan payments, utilities, and even insurance.
*Some baby things must be purchased new, such as the crib and car seat. Baby clothes and maternity clothes do not have to be new. People don’t need all baby items forever, so there are many great items at thrift stores, garage sales, and online auctions. Most maternity and baby items have been gently used for short periods of time (maybe 3-6 months) and quickly outgrown. There may even be unused items, because new moms often receive an excess of them as gifts.
* Be a smart shopper. Choose products on sale instead of limiting yourself to favorite brands and products that you automatically choose but don’t know exactly why. Many people shop for groceries once a week and buy more than 50 items each time. If you can replace even half of your items with store brands or cheaper brands that cost on average $1 less each, then you could save $25 each week. This adds up to $1,300 after 52 weeks in a year. The point is that you start paying attention to the prices and key qualities of a product, and not just the brand. Over time, this will make the habit of saving money second nature to you.
There are many spending habits you can change. You’ll just have to figure out where and how much savings you can generate.
Set the baby’s monthly budget: During the first year of life, you will need between $600 and $800 each month for the new baby. You can increase this amount by saving money over time or by reviewing your budget so that funds are available each month. You’ll need to think about the essentials your baby will need, including expenses before birth (prenatal pills, doctor’s appointments) and after birth. There will also be expenses for childbirth and postpartum care. It will be desirable to budget some money for health insurance; If you do not have health insurance, you will need to plan how to cover these necessary payments.
Start Saving Money: You may want to start saving money in a high-interest savings account even before you conceive a child. You’ll need a lot of money during pregnancy and the first year of life, and you’ll probably use most of what you save before then. But you’ll find that saving money for the future is also a good way to build up savings for the baby’s future. Saving unspent money during the month in a separate high-interest savings account gives you a pool of funds for emergencies, unexpected costs, and even for the child’s future.
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