Starting a family can be an expensive undertaking, and it isn’t something you should undertake lightly. And though there isn’t some precise financial marker that you need to meet in order to get married or have children, entering into this phase of life unprepared can contribute to the cycle of poverty. Instead of launching blindly into growing your family, then, consider honing your money saving skills so that you can better support yourself and your children.
Consult Your Coverage
One of the best predictors of your financial needs when starting a family is your level of health coverage. For those with excellent health insurance, prenatal care may be free, while other women may rack up huge bills while trying to meet their deductibles before their insurance even kicks in. In addition to checking how much of your deductible you’ve covered, learn about all expected co-pays – and unexpected ones. Though we all hope for healthy pregnancies, no one is assured that those 9 months will go smoothly.
Needs And Wants
A common mistake that new parents make is confusing what they need for their baby with what they want. For example, you need infant-appropriate hygiene products like gentle soaps and lotions to protect your baby’s skin, but you don’t need a baby bathtub – like many generations before, you can just put them in the sink. Similarly, you need a safe crib for your child to sleep in for the first year or two of their life; you don’t need a bassinet that they will quickly outgrow.
If there’s something that you would really like to have for your child, but it just isn’t in the budget, one of the best things you can do is ask other parents. Consulting your network of moms and dads will save you thousands of dollars over the years – in bathing suits your toddler will wear twice, fancy dress shoes they’ll outgrow in a month, or toys that last ten years but are only developmentally appropriate for two. Other parents love to share the wealth, so don’t be afraid to ask for what you’re looking for.
Think About The Future
You may not have a child yet, but even before your little one is born you need to begin saving for their future. This includes opening a 529 savings account, a special education account that allows you to save for your child’s education without the tax burden of traditional savings plans. College only keeps getting more expensive, so the sooner you start saving, the better prepared you’ll be when it’s time for your child to move on to the world of higher education.
Be The Budget Master
Finally, though it may seem difficult, start a budget before you child is born. Create one for your current expenses, including key areas where you need to save, as well as one that accounts for your expected costs when your child is born. How much, for example, do you plan to spend on childcare? Don’t just set out a ballpark number – do your research. Find out how much daycare or a nanny would be in your area, or ask your relatives if they would be willing to help out with the task. Many parents find that when they lay down the numbers, it actually makes more sense for one parent to stay home than to pay for childcare.
Having a child is a lifelong financial commitment and you can’t enter into it lightly – and you won’t want to. Rather, bringing a new life into the world inspires most people to take many more precautions than they would otherwise. They get life insurance, start a health savings account, and draw up wills. They forge deeper family bonds and budget for things they never before cared about. Having a child changes everything, including your financial situation and the only appropriate response is to plan accordingly.