Your hands are full preparing for a new baby. Not only must you address logistical challenges, finding room and time to properly care for a little one, but there are also widespread financial concerns brought on by a new baby in the family.
Painting the baby’s room and picking out child-sized furniture are romanticised concerns soon-to-be mums and dads contemplate before welcoming new family members. It’s natural to embrace these significant family milestones, there’s more to preparing than choosing paint colors and buying a crib. In fact, your life’s about to change more than you’d imagine, with a new baby on the way; proper financial planning can help ease baby worries.
Before Your Baby is Born
Certain parenting skills can only be learned through direct experience. Changing diapers, feeding, and bathing infants isn’t something you do very often, until you have one of your own – then the tasks become a full-time job. Though you can’t master all the parenting protocols until you’ve logged some hands-on experience with a new baby, you can take steps to reinforce your finances before your child is born.
- Plan for Leave – Babies require full-time care, so mum and dad may not be able to maintain their regular work schedules, whilst meeting baby’s demands. Unfortunately, time away from work may mean income interruptions, which isn’t ideal for growing families. Planning for work leave includes a close look at your employer’s policies and careful calculations between parental partners. To find financial balance without putting your earnings at risk, start by answering questions such as these: How much leave time is allowed? Who’s bringing in more money? What is the cost of child care?
- Boost Your Emergency Fund – Contingency planning is important for couples and individuals, but adding a baby to the mix ups the stakes for young families. Your emergency fund now serves as a safety net for your baby, too, so you can’t afford to put off savings any longer. If you haven’t done well putting by emergency cash, rededicate yourself to incremental savings, building a 3-6 month nest egg to cover living costs in the event of a financial crisis. Short-term loans can help in the meantime, offering fast financial solutions – even with a history of bad credit.
- Work Out a Budget – The financial landscape changes following baby’s birth, so you need to prepare for your new family’s ongoing spending needs. From the projected cost of diapers to childcare and nutrition, planning for baby expenses ahead of time leaves one less worry to address upon returning home with your new bundle of joy.
After Your Baby is Born
The hard part is over, but financial concerns linger beyond childbirth. After focusing on medical costs and pre-baby spending, emphasis naturally shifts following your baby’s birth. There isn’t a rigid calendar for working-out long-range financial concerns, but planning ahead helps new mums and dads prevent financial surprises.
- Consider the Cost of Childcare – According to recent reports, child care costs are on the up across the UK, challenging UK families to think outside the box. In some cases, one partner stops working, because staying home with the baby makes more financial sense than hiring out childcare and going to work. Dropping down to a single family income may seem drastic, but managing the financial burden of child care calls for creative solutions.
- Rework Your Budget – You’ve probably done a thorough job preparing for new household spending, resulting from a growing family, yet may still experience unexpected expense. After you’ve had some time to adjust, reassess your post-baby budget and make necessary adjustments.
- Look Ahead – Though it may be difficult thinking of your baby as a student, education spending is right around the corner. Start planning when you’re comfortable doing so, but don’t wait too long to prepare. Life insurance is another financial consideration to address in the short term. Your own policy should be evaluated and updated, as necessary, and you should also consider a policy for your newborn.
Preparing for a baby – whether it is your first or not – is a monumental undertaking. The last things you need whilst working out family details are unanswered financial questions. Planning ahead can help ease money worries, providing a financial roadway to follow during this life-changing period.