Welcoming a new family member is a life-changing experience and it should fill our lives with joy. There are, however, some financial measures that should be considered before the little one arrives.
The months before a baby comes into a household is filled with many plans and a good share of anxiety. Parents are expected to have a lot of things prepared for their big arrival, and the financial preparation it entails can be more than just a little daunting for the new parents-to-be.
From diapers to formula to even thinking long term about child care costs, parents must put some perspective into the matter before it actually happens and they need to see how well prepared financially they are for that moment when the newborn arrives into the house.
Make changes to the way you make your monthly budget
This should be done right after you realise there’s a new member of the family. Planning ahead for this situation is the best way to have a solid ground for when the baby arrives.
Discuss with your partner all the possible new changes and expenses that you will incur and that have a strong impact on your finances. Decide who is going to stay with the baby and see your capabilities to live with one income.
Look at your current budget-making ways and try to find areas where to save so you can use that freed money for baby expenses.
Bank account for the baby
Start saving for all the baby expenses that are coming is the best of ideas. This is a fund that can help you with bigger expenses – beyond formula and diapers – like a baby crib, strollers, car seat the list goes on so it’s best if you start saving for this right away.
A separate saving account for the baby fund can be a good way to manage your budget if you set it up with automatic transfers, even better. That way, each time you receive your paycheck a portion of it can go directly to the baby fund. This is very helpful for people who forget to save.
If you start doing this from the moment you and your partner realise that you are going to be parents, by the time the baby arrives you can have a substantial amount of money that can be a tremendous help for you.
Registry and gift lists
A baby being born is a big event and not just for the parents. Family and friends may get pretty excited about the event and maybe they wish to collaborate somehow. An early registration guarantees that there’s going to be something from diapers to the big items.
Family and friends usually try to lower the burden for the upcoming parents plus it’s a good time to strengthen bonds with them.
Make your house baby-proof
The baby will not be able to move on his/her own yet, but it is important to include the costs of making your house baby-proof in the budget. You need to prevent your baby from entering unsafe places around the house.
Make sure that you include safety gates, knob covers, door lock and don’t forget about locks on drawers and cupboards in your baby budget. It’s never too early to start baby-proofing your home.
Consider getting life insurance
Now that you have a little person to look after, you need to know what will happen to your child if something unexpected happens and you are no longer around. Life insurance is a good way to future-proof yourself and your family against the inevitable.
Get the right guidance to determine what kind of life insurance is best for you and your family interests. Making a will is also a wise move, remember that if you die without writing a will, the government may have a say about what will happen to your assets and your money.
Now regarding insurance, make sure that you have reviewed your PPI status in case there’s a pending claim waiting for you. This can represent a financial aid that you can really use now that the baby is coming.
After the PPI scandal, the government is pushing banks so people can reclaim the money they were unfairly charged for many years.