Let’s face it. First-time parenting can be exhilarating and a little overwhelming. While there are amazing coos, cuddles and “firsts,” parenthood is a big adjustment for both the new parents and their finances. In fact, the average cost of raising a baby through age 18 is north of $245,000.
But don’t worry. Whether you’re planning to start a family or are anxiously awaiting the arrival of your first baby, there are three things you can do now (outside of enjoying sleep) to get your financial life in order.
[See: Your Month-to-Month Guide to Savings.]
Budget for the Bundle of Joy
First things first. It’s important to create a budget or revisit the one you have to accommodate the new addition to your family. Start by looking at your fixed, non-negotiable expenses like rent, utilities and groceries. Then, subtract what you spend from your monthly income. You’re then left with discretionary money for non-essential expenses like entertainment, shopping and dining out. How do your expenses stack up? Do you have enough money to cover your fixed expenses every month? Do you need to cut back on spending to allow you to save for baby essentials like a new crib, stroller and diapers?
Budgeting is a great way to help you identify your wants versus needs and trim the fat. Personal finance apps take the guesswork out of money management. They help you better understand how and where you spend so that you can create a budget that’s right for you and your growing family. Apply those budgeting insights to help you make smart financial choices.
It’s also important to remember that budgeting is not a one-time event. It should be part of your daily life. Revisit your budget weekly, monthly or annually and make adjustments where needed, especially around life events such as having more kids, budgeting for children’s activities or changing careers.
[See: 10 Fun, Frugal Ways to Spend Your Free Time.]
Be Prepared for the Unexpected
The most important thing you can do for your baby and your finances is to have plans in place that protect your most precious assets. Among the things to consider when planning for baby:
— Create or modify your estate plans such as a will and trust. Who will be the child’s guardian if something happens to both parents?
— Establish an emergency fund that can help you navigate unexpected events like a medical emergency, home repair or job loss. It’s good to have at least three to six months’ worth of living expenses covered. Start small by setting aside just a few dollars a week and watch your money build over time.
— Update or add beneficiaries to financial accounts like 401(k) plans.
Borrow and Bargain Shop
Many new moms want (and deserve) the latest and greatest in baby supplies when it comes to clothing and caring for their newborn. But getting the best doesn’t have to cost a fortune! In 2015, Mint users spent roughly $1.1 billion on baby supplies at a number of baby-themed merchants. An easy way to shave these costs is looking for a good deal. Start by reaching out to your network of friends and family and see who has baby gear they’re willing to sell or give to you. Cribs, changing stations, strollers and clothes for you and baby are great items to borrow.
[See: 12 Money-Saving Ideas for New Parents.]
Once you’ve exhausted your personal network, look for affordable deals at consignment shops, yard sales and online classified ads. These are often great places to find toys and books at a fraction of the cost of new items. Good for your wallet and the environment!
Sign up now for loyalty rewards programs at children’s stores to start taking advantage of coupons and discount offers.
With these tips in mind, you’ll enter parenthood with a financial plan in place and more money in your pocket, freeing you up to do what you love … spend time with your baby.
More from U.S. News
13 Money Tips for Married Couples
10 Money Leaks to Shut Down Now
50 Ways to Improve Your Finances in 2016
3 Money Must-Dos for New Parents originally appeared on usnews.com
