If you normally think of budgeting as a boring task, things are bound to change when you have a baby. Although having a baby is very exciting for a couple, it can have a big impact on your household income and expenses. Maybe you’re a two-income couple struggling to save money and wondering how you’ll cope when you only have one income and even more to eat. The good news is that no matter your income, you can take some smart steps to make having a baby more affordable and have fewer financial worries so you can focus on the important things like your new baby.
Calculate your current living expenses: The first step in budgeting is to list all of the expenses that make up your current living expenses without your baby. Make sure all expense items are included. The monthly bills you pay regularly are often the easiest place to start: rent or mortgage, car, groceries, electricity, water, phone, cable, internet, fuel, membership fees, etc. Once these amounts are noted, start listing them Spending other things. No matter how small the effort is, these little things add up. Summarize your total expenses each month.
Determine your income: You want to know your total household income. It should be easy to determine the total amount of money coming into your bank account. Subtract your expenses from your income, the rest is your baby budget. A baby may need around $800 per month or nearly $10,000 in the first year of life. Do you still have enough money left? It is also important to consider differences in income before and after birth. If you have a two-income household, there may be a loss of income if the mother has to take time off to have a baby. You must specify the length of this period.
Reduce unnecessary expenses: If the baby budget isn’t enough, look at things that can be cut, especially non-essential expenses. Many people spend almost a third of their monthly income on food alone. Saving money on this item will go a long way.
* Pack a lunch. Cook at home instead of eating out. Make coffee every morning instead of getting it from the coffee shop.
* Impact areas tend to be internet services, telephone and cable. Upgrade your cable package to a cheaper package. Does it really matter if the online connection takes a few minutes longer? There can be a difference of $15 to $30 in monthly fees. If you can strip the features of these three services down to the bare essentials, you can save up to $100 per month; that’s $1,200 per year.
* Consider switching to cars with low gas mileage (but make sure they are kid-friendly). Driving a smaller and more efficient car can save you on fuel, loan repayments, maintenance and even your insurance.
* Some baby items should be purchased brand new, such as a baby bed and a car seat. Baby clothes and maternity clothes don’t have to be brand new. People don’t need all of their baby gear forever, so there are tons of fantastic items available at thrift stores, flea markets, and online auctions. Most maternity and baby items have only been gently used for a short period of time (maybe 3-6 months) and are quickly outgrown. There may even be unused items, as new mothers are often given an overabundance of them.
* Be a smart buyer. Go for sale products instead of sticking to brand names and favorite products that you automatically choose but aren’t sure why. Many people grocery shop once a week and purchase more than 50 items each time. If you’re able to replace even half of your items with supermarket store brands or cheaper brands that cost an average of $1 less each, you could save $25 each week. This adds up to $1,300 after 52 weeks of the year. It’s about starting to pay attention to the prices and key features of a product and not just the brand. This will eventually make saving money a habit.
There are many spending habits you can change. You just need to figure out where and how much you can save.
Set your baby’s monthly budget: During the first year of life, you will need between $600 and $800 each month for the new baby. You can raise this amount by saving money over time or adjusting your budget to allocate funds for it each month. You need to think about the essential things the baby needs, including expenses before birth (pregnancy pills, doctor’s appointments) and after birth. There are also costs for the delivery and aftercare. It would be desirable to budget some money for health insurance; If you don’t have health insurance, you’ll need to plan how you’ll cover these necessary payments.
Start saving: It would be desirable to start saving in a high-interest savings account before having a child. You will need a lot of money during pregnancy and the first year of life and will probably use up most of your savings beforehand. But you’ll find that saving in advance is also a great way to build savings for the baby’s future. By putting any unspent money in a separate, high-yield savings account for the month, you’ll have a pool of capital for emergencies, unexpected costs, and even the child’s future.
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