A baby brings excitement and joy to the life of new parents. They are well aware of the fact that everything from their daily life to finances will change once the new-born arrives. Therefore, it is entirely normal to panic in this situation.
For the finances, there will be many expenses within the first year that can put a dent to your pocket. Planning is essential to make the journey a little easy to manage. Here, we have mentioned some tips to make yourself financially prepared for the first few years of parenthood.
Prioritise the Expenses
The baby comes with many expenses, but it doesn’t mean you stop saving for your future. You still need to pay off the debts and save for the retirement. Therefore, keep retirement savings, emergency funds, and tax repayment as a priority.
You should start saving for college and other expenses once you have enough money allocated for these expenses. The kid can have an education loan, but the is no retirement loan option for you.
List the Baby Essentials
Making a list of essential items for the baby is extremely important to create a budget. This way, you can categories different things based on their need. Deciding on whether to buy a new or used item is also made more comfortable with this list in hand.
Items like stroller, cribs, toys, and playpens can be bought second hand if they are gently used. These items do not serve any purpose after a year or two. You can sell them after the use to raise some money as well.
Borrow Stuff for Baby
Borrowing stuff from friends and families for the baby is even more budget-friendly than buying used items. Again, these items may never get used after a short period. So, there is no point in buying them if you can use them for free.
Buy in Bulk
Baby products such as diapers and wipes are used a lot over the first couple of years. You can get a great deal when you buy them in bulk. Look for sales in the stores or online marketplaces.
If you are short on money while these essentials are on sale, apply for a short-term take out doorstep loans. You may save more money on the discount than the installment of this loan.
Don’t Get Fancy
While you are shopping for the baby, you may put unnecessary expensive items in the cart courtesy of temptation. It is often caused by the desire to fit in with other parents. Remember, you need to stick to the budget and eliminate these expenses.
Always skip the items that are nowhere near the list of essentials. You can try certain generic items instead of brands. Your baby won’t feel any difference, and neither should you.
Find a Toy Library
The innovative idea of a toy library has allowed parents to borrow toys instead of buying them. You can find one in your neighborhood. Make use of it and let your kid play with new toys every week without purchasing them.
Practice Budgeting
You should start living on less before the baby arrives. The income may get reduced for the duration since one parent might have to take maternity or paternity leave. There is an outstanding possibility that you decide one has to leave the work to take care of the baby.
Prepare for the Changed Spending
The expenses of the newborn will change over time. It will start with diapers and day-care expenses, and soon you will be paying the kindergarten fees. Make a reasonable estimate of the upcoming costs with a little research.
Also, anticipate how long these costs will last. An excellent way to reduce the burden is by asking for must-haves at the baby shower. Review the monthly expenses and make sure you are well prepared for the next month.
Get Ready for Financial Crisis
There will come a time when you will find yourself in financial distress. There is no need to panic since there are doorstep loans like provident available to help with the money. To repay the loan, you can start a side gig to make some extra money.
At the workspace, this is a good time to ask for a raise. You can start looking for other opportunities with a better paycheque. Downgrading or selling the car can also help with quick cash. Consider refinancing the house if you have enough equity on the home.
Carry Cash
The plastic cards in your pocket play a significant role in your failure to not fall for the temptations. Instead of carrying credit cards, you should always take enough cash with you. This will also reduce impulse buying at the stores.
In the end, parenting can be challenging with the juggling of the finances and care for the baby. You must prepare yourself during the pregnancy months for the responsibilities that will come upon you. There will be ingenuity and sacrifices over the years.