Frugal Family: Budgeting Tips for New Parents
Having a baby is exciting and nerve-racking - not least because it involves a huge financial commitment. Financial expert, Dave Landry Jr., has 9 tips on how to minimize the impact of your new bundle of joy on your bank account.
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Congratulations - you’re having a baby!
While certainly one of the happiest times of your life, your new rose-colored glasses may already be falling away as the financial realities of life as a new parent start to sink in. The diapers, the doctors, the food, the clothes - it all adds up, and quickly. While we certainly would never want to compromise quality where our loved ones are concerned, here are some tips to stay ahead of your baby-related expenses:
Knowledge is power here. Speak to your insurance company and find out ahead of time exactly what your particular plan covers. Be as informed as they are. Know your co-pays, how much and how many? Which are the approved doctors? How much of your hospital stay is covered? You can keep costs down by avoiding surprises.
Maternity Leave Savings
Many employers don’t offer paid time off, even if they do offer you the time to be home with your new addition. Set aside money during the pregnancy to cover your expenses while you aren’t working. Be sure to save more than the bare minimum to cover unexpected costs.
Flexible Spending/Health Savings Account
Check with your employer regarding flexible spending or HSA accounts. Where offered, you can deduct a certain amount of your income before taxes to help prepare for the needs of your child when the time comes. If you have extra after meeting your needs, then get a head start on that college fund by moving the extra funds into a savings account.
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If your pregnancy is low-risk, meaning that you’re below age 35 and carrying a single child with no known complications, you might qualify for delivery at a birthing center. They typically run half the cost of a hospital visit, but with a few caveats: The nurses and midwives will deliver your child and the doctor will only be on call in the event of an emergency. Medication use is little to none (so a high-pain tolerance is key). Depending on the center’s relationship with nearby hospitals, assistance in an emergency situation could require longer to arrive than it would at a hospital. However, if you feel comfortable and are on a budget, it’s certainly an option worth considering.
Consider Your Luxuries
A baby changes everything in your life and your previous lifestyle will take some hits as your priorities shift. Take a hard, honest look at your spending. See if you can cut back on your dining out, entertainment, and luxury purchases, as well as other “needs” like a new wardrobe or car. In addition, you might switch to a lower tier cable package or discontinue your service completely (since you’ll have less time to watch TV); you might also become more conscious about your utility usage. A little awareness can add up to big savings.
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Make Your Own Baby Food
Those little jars of mashed peas sure add up. Invest in a food processor and make your own baby food using healthy ingredients. It will save you a lot of money while still giving your baby the nutrients he or she needs. Remember to freeze your leftovers lest they spoil.
Kids grow fast. So as cute as he may look in that tiny, three-piece suit, your son will quickly outgrow it. You can save a ton of money by shopping second-hand or even find hand-me-downs from friends with older children. Be sure to inspect clothing in proper lighting before purchasing, and buy larger sizes so your child has room to grow into and get more use out of the items.
Huggies and Pampers both have points systems that can be redeemed for books, toys, or baby supplies. Be sure to check out social media outlets geared toward parents and sign up for coupons on major brands’ websites. Amazon Mom offers free two-day shipping for up to a year on certain common baby items.
There are plenty of ways to entertain your children that won’t cost you a dime. Parks and playgrounds provide an area for exercise and burning off energy. Libraries often have educational events for youngsters like storytime and sing-a-longs. Check your local listings for family-friendly fun like puppet shows in bookstores or live music in restaurants.
Your child is a blessing, but it may take a little more work to stay on top of your finances. Thankfully, with some effort and organization, you can stay in control of your budget and let your thoughts dwell on the reason for your joy rather than the complications it brings.
Dave Landry Jr. is a writer and small business owner from Southern California. He writes about all-things finance, including investment, banking, frugal living, and debt management.