Although it’s no surprise that having a new baby is expensive, many first-time parents are still shocked at just how many costs there are in keeping a little one happy and healthy. Every little bit helps when planning a budget for your growing family, but at the same time, you still want to give your baby the best of everything.
How do you care for your bundle of joy without breaking the bank? It starts with a lot of planning.
Adjust Your Budget Now
Ideally, you would start saving up for a baby or adoption a year or more ahead of time. However, life doesn’t always work that way. It’s still important to adjust your budget as soon as possible and start living more frugally. Every dollar you put back now can ease the pressure of being first-time parents.
Be realistic about your household finances. What can you afford to cut? Where could you economize? If you’re going on the parenthood journey with a partner, have a frank discussion about needs versus wants. Accept the fact that, for the foreseeable future, many of those wants won’t have a place in the budget.
Most people will find that the majority of their recreational spending goes toward food, drink, and entertainment. Get used to scaling back those expenses now and put the savings into an account for your baby’s future.
Plan for Parental Leave and Future Childcare Costs
Unfortunately, the United States has one of the least generous parental leave policies in the developed world. You might not be entitled to any leave, especially if you are a male parent or adopting an older child. Start the conversation with your employer early to find out how much paid leave you have available. If paid leave is not an option, figure out how much time you can afford to take. Don’t forget to factor in sick and vacation days.
In addition, two-parent households should do the math early on to compare one parent’s salary to the cost of full-time childcare. It’s also possible that you might be able to work out a babysitting rota where you trade sitting with loved ones or neighbors, opening up your schedule for part-time or full-time work.
Watch Out for Hidden Fees
From the moment you start scheduling medical appointments or considering adoption, the fees will start adding up. Some of those fees might end up being a huge surprise! For example, hospitals love to sneak in extra charges on your bill. The last thing you’ll be thinking about is cost as you welcome your baby into the world, so have a plan ahead of time. Make sure that your partner or support person knows when to say “no thank you” to add-ons and unnecessary charges at the hospital.
Adoptive parents may also find hundreds or thousands of dollars in additional fees as they proceed with their journey. Make sure that you are working with a reputable agency, especially if you are pursuing an international option, and plan for all contingencies.
Get Those Freebies
You might be shocked at how many freebies you can get as a new parent. Companies would love to get you hooked on their brands, and they’ll provide free samples and even whole kits that contain a variety of essentials. Sign up for email lists or text coupons to get the maximum savings. If you’re giving birth in a hospital, you might be entitled to a variety of toiletries and essentials without any additional cost. Just make sure to ask first!
Chances are very good that you know someone whose own children have outgrown clothing, toys, and supplies. They’ll probably be happy to let you take those things off their hands for no cost. You can also find children’s clothing swaps in many towns. You might even be able to borrow or rent equipment such as a pump from your healthcare system.
Of course, there’s also the generosity of your friends and family to consider. If you decide to register for a shower (and yes, you can hold a shower for older adopted kids, too!), be specific about asking for the things you need. If you receive duplicates of something or a gift that’s pretty but not exactly functional, exchange it for supplies such as diapers. Your loved ones never need to know.
Get Life Insurance for Yourself
Nobody likes to think about the possibility of needing life insurance. And in many cases, the premiums involved in whole life coverage simply aren’t a smart investment. However, there’s one time when you absolutely must have life insurance, and that’s when you have a minor child under your roof.
If anything happened to you, you’d want to know that your child would have enough money to get by. Life insurance for new parents is a standard expense that you should plan for as part of your baby budget. Many employers offer some form of life insurance; however, it’s not a bad idea to purchase your own policy.
In addition, you should add your child to your will as soon as possible. Life is unpredictable, and knowing that you’ve covered all these bases will give you peace of mind.
File All the Paperwork
Speaking of filing, there are a lot of forms that you’ll need to fill out as you welcome a new addition to your family. In addition to an updated will and life insurance policy, you should also understand how your child will impact your taxes. If you’re not sure how to claim your bundle of joy on your tax return, talk to a tax advisor well before the filing deadline. Failing to claim your kid could result in the loss of thousands of dollars in potential credits.
You’ll also need to make sure to file for your child’s Social Security Number. Some hospitals will automatically do this for you, along with issuing you their birth certificate. If that service isn’t provided, make sure that you have a plan for filing as soon as possible. Scammers could potentially steal your newborn’s identity if you’re not very careful. Adopted children, particularly those who are adopted from abroad, require additional paperwork to receive an SSN.
Finally, you need to add your child to your health insurance. Most plans can be expanded (for an additional fee) to cover minor children. This counts as a qualifying event so that you can change your policy outside the open enrollment period.