The skyrocketing costs associated with raising a child are intimidating. Worrying about how to afford diapers and medical care for a new baby is stressful enough for new parents without adding the pressure of rising tuition fees as your child grows. A growing number of financial methods are now used by many to save money or build their financial portfolio. Although you may be familiar with a couple of these financial terms, you might not realize how these accounts and other financial considerations can greatly affect the baby you’re going to have. It’s never too early to start budgeting for a new baby.
Spend time on the Family Financial Portfolio Parents like Beth and Bill Ryan of Lake in the Hills, Illinois, found dedicating time to their financial portfolio prior to having a baby beneficial. “Between the extra and unexpected costs of having a child, and the amount of time it took to adjust to being parents, we wouldn’t have been able to investigate all of our options as thoroughly as we did until our daughter was older,” the mom of two explains.
Planning your finances and family budget before your baby arrives offers the chance to save based on both long-term and short-term goals. Registered financial planner and certified financial specialist Rick Sabo of Gibsonia, Pennsylvania, stresses the importance of familiarizing yourself with savings plan options. “This can offer financial assistance in the first months of having a baby as well as create the flexibility to adjust your savings plan as your child grows and your family’s needs change,” says Sabo, the Regional Vice President of Money Concepts. Sabo is one of many financial experts who help their clients rating alternatives such as working from home or forming a babysitting coop with friends and neighbors.
Budget for your New Baby’s Day-to-Day Costs New parents allocate money for a crib or to decorate a nursery, but they often do not anticipate the actual day-to-day costs of having a baby. Parents like the Ryans realized that even though it is convenient to pick up a pack of diapers at the local grocery store, you pay for that convenience. “I wish we [had] compared the prices of formula, diapers, baby food, developmental toys, etc. at grocery stores, discount centers, and pharmacies before our daughter was born to have better planned our budget,” Beth Ryan admits.
Consider online and bulk purchase from wholesalers and thrift markets as alternatives to replenish your stock of high consumption items. Another area of consideration is medical expenses for your newborn or baby. Know your health insurance plan’s limitations and practices for all co-payments, prescriptions plans, and referral requirements ahead of time to determine the most economical pharmacy for your child’s prescriptions.