Having your first child can be one of the most exciting, amazing and overwhelming experiences, all in one. If you are a soon to be first-time parent, you’re probably trying to get your head around what your new lifestyle will be like and all the responsibilities that will fall upon you once your baby arrives. One of the many worries that new parents have is their financial situation — after all, it is no secret that raising a child is a costly affair. This is why budgeting plays such an important role in the lives of new parents. Today, we have a look at how you can better manage your finances once your bundle of joy arrives, so read on to find out more.
- Determine Your Financial Priorities
If you’re wondering, “what is the cost of a baby?”, a NerdWallet study found that most parents spend an average of $21000 in the first year alone. This is why determining your financial priorities before the baby arrives is always recommended. One of the common mistakes that new parents make is that they are often in a rush to save for things such as a child’s future college fees or wedding costs. While there is nothing wrong with planning for the future, it is equally important to focus on the here and now.
Your first year as a parent will be the most challenging as you find ways to adapt to your new life, so sitting down and determining where your money should be going is key. As a general rule of thumb, new parents should focus on the essentials such as housing, utilities, transportation, food, transportation, and medical expenses, on top of baby-related necessities such as cloth nappies and baby formula such as european baby formulas. Once you have budgeted for these vital components of daily life, you are free to do as you please with whatever leftover money you may have, whether that be spending it on your little one, spoiling yourself, or even saving it for a rainy day.
- Be Mindful Of Your Baby Related Purchases
Babies develop and grow at record speed, and this is something that is important to remember when purchasing items such as baby clothing or furniture. We understand that becoming a parent for the first time is incredibly exciting and you probably want to buy all the cutest outfits for your little one, but we always recommend that new parents be mindful of their purchases and shop second hand whenever possible. There are numerous stores online that carry pre-loved baby clothing and items at a very reasonable price, saving you hundreds if not thousands of dollars on clothing that your baby will quickly outgrow.
Other items that you can purchase second hand include shoes, toys and playpens. However, it is important to note that if you are sourcing second-hand car seats, bassinets or cots, ensuring that they are compliant with safety standards and in good condition is paramount.
- Purchase In Bulk
When it comes to daily essentials such as nappies, baby wipes, infant formula and baby food, buying in bulk is one of the best things you can do to maximise your dollar. Shopping at stores such as Costco can be a really cost-effective way of securing essentials without breaking the bank or skimping on quality. Other things new parents can consider purchasing in bulk include laundry detergent (in preparation for the mountains of laundry you’ll be dealing with when the baby arrives), snacks, baby bottles and bath products such as shampoo and baby wash.
- Consider Meal Prepping
Once your baby arrives, you’re probably going to be on your feet all day long. As such, time to cook is probably a luxury you won’t have, resulting in many parents relying on take out and fast food as a quick and easy option on a long and tiring day. Aside from being unhealthy, the cost of takeout can quickly add up, resulting in a hole in your pocket and a body that isn’t as well-nourished as it should be. The solution? Embrace the concept of meal prepping by spending a couple of hours on the weekend bulk preparing a few delicious and healthy meals that you can keep in your refrigerator. That way, come dinner time on the weekdays, all you’ll have to do is pop your meal in the microwave, pour yourself a glass of wine and let your hair down after a long day of being a super parent.
- Review Your Childcare Options
If you plan on being a working parent, you may already be worrying about the childcare costs that you’re going to have to fork out in the near future. The truth is, childcare is expensive and we’re not going to sugar coat it. However, by reviewing your options sooner rather than later (ie, when you’re still pregnant), you increase your chances of finding a relatively more affordable childcare option that is within your budget. Starting the hunt early also gives you a head start on working out how much Child Care Subsidy (CCS) you’re entitled to. Lastly, if your schedule permits, choosing a childcare centre that is situated further away from the city centre is a great way for parents to save some precious dollars.
As a parent, you may be expected to sacrifice a few of your financial goals, but rest assured that these sacrifices don’t have to be permanent. The first few years of a child’s life are the most expensive, and budgeting in this crucial period is key to ensuring that you remain financially stable. We hope that this article has given you a few ideas on how you can manage your money when your baby arrives, and we wish you and your new family all the best!