Undoubtedly, having a baby will have a positive impact on your life forever. It’s an exciting period in life when you’re waiting for a baby to arrive but it’s also a stressful time when you’re worried about being financially stable and able to support your newborn child.
Many enter a period of working harder to finance the required purchases or prepare everything for the arrival, but there are ways that you can plan ahead to bring your finances in line before the baby arrives.
Adjust your saving habits accordingly
When a baby arrives, so does an immense amount of extra unexpected expenses and they will all be a drain on your finances. You might have already been trying to have an emergency fund growing for those unexpected purchases and if you haven’t, then it’s better to start late than never.
Making this regular contribution will be a commitment to ensuring your baby has everything that it requires from daycare to suitable learning toys, but will also provide some peace of mind that you’re financially stable.
Be prepared to live on one income
A challenge that you must prepare for is when someone takes leave to look after the baby. This is generally when a mother takes her maternity leave to care for the child and results in the household depending on a single income.
It’s worthwhile calculating your income as most maternity and paternity leaves feature either full pay or a percentage of their regular pay.
Sometimes you can’t plan too far in advance to be expected to survive off a single full income but once you know you’re becoming parents. This signals a good opportunity to make regular contributions to compensate for the money that will be missed during the maternity period.
A difficult task when expecting a baby will be to purchase all the clothes and accessories for their arrival. However, the costs of all the purchases can soon accumulate into an unfeasible cost that drains your savings.
Careful management of your finances will provide some financial stability. There will be expensive purchases by prior savings are designed to support the costs but a cost-saving alternative is to see if relatives and friends have items from previous babies which they do not need anymore and are willing to let you have them.
A recommended method for reducing overspending on purchases is to make a list of everything you need to calculate how much you will be spending and whether this is feasible with your savings. It might highlight that can save costs on specific parts than paying and worrying about the overall cost afterwards.
Unexpected money into a baby fund
Receiving unexpected money will always be an added benefit for any financial situation but it can also be an opportunity to supplement your baby fund. Whether it’s an annual bonus at work or you’ve decided to check if you’ve got an outstanding PPI claim, regardless of where the money is received. Dedicating the money to support a significantly expensive purchase or to further expand your savings.
Incorporate additional expenses for yourself
At a time when you’ll be focusing on the baby and ensuring that it’s healthy and receiving the best at the start of its life. It’s also an opportunity to review your own security, it’s a time to consider that you now have a dependent which if anything happens to you, you must have processes in place to support them.
Ensure that you’ve got sufficient life insurance to cover your dependents financially if anything unexpected happens to you. It’s also a good opportunity to ensure that you’ve got an updated will that entrusts your savings to your dependents.
Don’t let a lack of financial planning ruin the start of your new role in your life. Your baby needs a solid financial stability for all the additional costs that previously weren’t required. This might mean an adjustment to your lifestyle and income to this new stage of life. Making sure that you have clear goals, not just for the baby and your family, but also for you.