Having a baby is one of the biggest emotional and financial decisions you’ll ever make in your life. Throughout the trials and tribulations that come with raising your own child, most parents agree that the benefits outweigh the costs. But, are there a few simple money tips for new parents that could make things easier?
If you’re planning on having a baby this year, however, you can expect to pay over $300,000 over the next 18 years for your child’s food, shelter, clothes, education, activities, and medical expenses (just to name a few).
4 Frugal Ideas for New Parents
Don’t fret over this seemingly high cost, because there are several ways to save money on baby-related expenses without sacrificing the quality of care and clothes you provide your little one. Here are some of the many tips for new parents and ways you can save money as a new parent.
Practical Requests for Baby Shower Registry
Baby showers are great opportunities for not only sharing your joy about your new member of the family but also stocking up on much-needed items for the baby. Although it’s fun seeing all the cute outfits and booties you can’t wait to dress up your baby boy or girl in, it’d be wise to request necessities like diapers and baby food on your registry as well.
After all, the average baby goes through 2,700 disposable diapers in its first year, which costs about $60 per month! You can lighten this financial burden by asking family members and friends to bring diapers to your baby shower (they might also throw in an adorable outfit or toy, just to make it both a practical and fun gift).The average baby will go through over 2,700 disposable diapers. Check out these frugal tips to save!Click To Tweet
Explore Child Care Options Before the Baby Arrives
If you and/or your spouse have already mapped out the costs of starting a family, then you probably already know that childcare will be one of your biggest expenses (the average American pays about $18,000 per year). Unless one parent works from home or a company you work for has a generous paid maternity leave policy, childcare will be a vital monthly expenditure until your child is old enough to start going to school.
To get started, you can research your childcare options before the baby even arrives, just so you get an idea of how much you’ll actually be paying versus what your projected budget is. Starting early offers the additional advantage of securing a spot at a quality, affordable childcare center so you can return to work with peace of mind, knowing your little one is in good hands.
Be sure to also ask your employer if they offer a Flexible Spending Account, which you can use to set aside up to $5,000 per year for childcare expenses. If this option is not available to you, there are still significant tax credits that the IRS offers to parents ($3,000 child care credit, for instance), so be sure to keep these options in mind when you’re budgeting for childcare.The average cost to raise a child in the United States is now over $300,000.Click To Tweet
Compare Life Insurance Options
If you don’t have life insurance yet, then you’ll need to add this to the budget for your baby’s well-being. Although life insurance may seem confusing, there are many informative resources available to help you decide which policy is best for your situation and avoid overpaying on policy add-ons that you might not need.
It’s not fun thinking about worst-case scenarios when you’re expecting the most joyous event in your life, but life insurance is crucial for financially securing your growing family in case of an emergency or unexpected event, so start researching your options as soon as you can to get the best rate.
Start Saving for College
When you’re planning for a baby, paying for college might be the last thing on your mind. However, there are many benefits to set both short-term and long-term financial goals involving your child, such as setting up a college savings fund.
There are several ways to start saving for your child’s future from the moment they’re born, including a 529 College Savings Account, Roth IRA, and taxable index funds. Sure, college may seem like a distant goal for your new infant, but it’s never too early to start saving, especially when they’re young! The more years you have, the more interest that investment will accrue to help them pay for college tuition, which is likely to cost exponentially more in two decades.
To help you get started, Betterment offers great advice for parents who want to save money for their children’s future. It’s also important not to neglect to save for your own future, so Betterment offers additional advice for parents saving for their retirement while simultaneously setting aside money for their child’s educational expenses.
Here Comes the Baby!
Don’t let financial stress put a damper on this wonderful new time for your family. Instead, focus on ways you can save money on baby-related expenses while giving your newborn all the love and attention you can offer.
It’s understandable if long-term concerns might go on the backburner for those first couple months. Even if you don’t start saving right away, try to invest in your child’s future within their first year of life and they’ll thank you when they’re older.
What do you think? Did I miss any easy frugal money tips for new parents? What are your favorite money tips for new parents?