If you're an expectant parent, you've probably thought about all of the things you need to plan for - a nursery, the child's college fund, and the various expenses involved with having and raising a baby. In the US, it's not just paying for food and extra accessories that parents have to worry about, but the actual cost of having a child in a hospital too.
Just getting a safe delivery sorted out for your bundle of joy can cost thousands. It's no surprise that countless parents find themselves worrying about how they're going to make ends meet.
The good news is that if the idea of parenting expenses has you overwhelmed, there are a few things you can do to get your strategy back on track. Here's what you need to do to prepare for the financial side of becoming a mother or father.
Design a Personal Budget
The easiest way to upgrade your saving strategy instantly when you're becoming a parent, is to start with a household budget. This is how you make sure you know how much money you're spending each month, and how much you're earning. The more you know about where your cash is going, the easier it will be to identify areas where you can start to save.
Your budget will also allow you to become more aware of your trigger areas. For instance, if you're the kind of person that buys a lot of food but also throws a lot of it away, you'll learn how to make sure that you always go shopping with a list to keep waste to a minimum.
Go Online to Reduce Monthly Expenses
With your budget in hand, you'll have a crucial tool you can use to begin cutting your monthly expenses. You should be able to save on things like entertainment and utilities fairly easily, by looking for free things to do in your spare time. However, other expenses can be more difficult to deal with. For instance, you might be wondering how you're going to cut the costs of your insurance bills or personal loan repayments.
The good news is that the internet can help with more than you might think. Online comparison websites allow you to check the deals you can get on everything from your health insurance, to your loans, so you're always paying the least you can on monthly costs. The less you have going out each month, the more you have to spend on your new baby.
Create an Emergency Savings Account
Although there's a lot of things to pay for when you decide to have a baby, including healthcare, cribs, and food, you can't afford to forget about savings too. Ultimately, you're going to need an emergency savings account now more than ever. This will be the money you can use to tide you over if your maternity pay isn't enough, or you're struggling with just one income when maternity is over.
To make the most out of your emergency savings account, try living on just a single income for the nine months leading up to your due date. This will be tough at first, but it will help you to see whether you can afford for only one parent to go back to work after the birth. It will also mean that you have more money to spend when your child arrives.
Look for Places to Reduce Discretionary Spending
One of the easiest areas to cut costs in when you're expecting a new child is discretionary spending. Now that you're becoming a mother or father, you should be able to see that you can't always afford to go out to movies with friends or pay for an expensive dinner. Instead, you might need to think about finding some less expensive ways to spend your free time.
Consider going for a walk around your neighborhood to burn off some extra energy or cuddle up on the couch with a Netflix show. Having fun doesn't have to cost a fortune these days. If you want to catch up with friends, invite them for a meal at your place rather than going out.
Don't Overspend on Baby Buys
Finally, remember that you don't necessarily need to spend a fortune on your new bundle of joy. There's no point in buying shoes for a newborn who is probably never going to wear them. Additionally, there's a good chance you can rely on friends and family members to overwhelm you with gifts like free clothing and toys when you're expecting too.