A new baby brings a lot of joy, hope and excitement to a family. The introduction of a new baby raises numerous questions related to money as new parenthood naturally comes with new financial responsibility.
A baby is another mouth to feed, clothe, keep entertained and educate – all at significant cost. Can you afford to have a baby? The key is to be prepared and aware of your financial situation.
Here are some of the steps you should consider as you plan for a new baby.
Shop for baby on a budget
Whether you are expecting your first or your fifth child, chances are that you need some new baby gear. There are hundreds of different items that you need when the baby arrives, and it is important to remember that stocking up does not mean you have to clean out the bank account. If you do a little bit of research beforehand, you can get everything that you need at a fraction of the retail price.
The first question that a new parent-to-be asks is “what gear do I need?” There are many things that are convenient to have, and many things that are a “must have.” Once you distinguish between the two, you can start stocking up on the “must haves”.
I recommend that you start shopping for bargains early on in your pregnancy. You will save more money, and eliminate the last minute rush that many parents undergo. Most baby sites will provide you with a checklist of the baby “must haves.” Print this list out, and then begin to compare prices and makes and models. (check out the LagosMums Baby Shopping List)
Every parent-to-be is on a budget. The trick is to make the most out of that budget. First, consider looking at local yard sales for various baby gear. You can often get some cheap deals, on things that are in good shape. If you are looking for some really good deals, go online. There are hundreds of different baby sites, which offer discounts. You may also try an auction site like eBay (locally try Jumia).
Shopping for baby on a budget can be a lot of fun if you approach it correctly. Create a list of the items that you want to shop for, and stick to it. Look for discounts and deals both locally and online. In no time, you will have a nursery full of baby gear ready and waiting for your new little bundle of joy! Congratulations and happy shopping!”
Make necessary plans
Calculate roughly how much you will need to provide for all the costs. Will your income be enough to cover all these additional expenses? Are you or your spouse in a position to earn additional income by increasing your productivity at this time? If not, you may have to start cutting down on non-essential expenses before the baby is born and adjust your lifestyle accordingly.
Start saving early
As soon as you decide to start a family or as soon as you know that you are expecting, start to set aside some money on a regular basis; create a “baby fund” to cover looming expenses. Such savings will be very useful when the baby is born as one parent usually has to take time off work for maternity leave and even longer, which can have implications for family income. You should also consider taking this opportunity to save that money in some type of investment vehicle for future or emergency use
Have a meeting with your partner and ask relevant questions
Will you need and be able to afford a bigger apartment/ home. How much will childcare cost? Can you afford to have your spouse not work for a period of time? How will you get by on one income alone? Your monthly household income is likely to change; Who will take care of the child? Will one parent stay at home; work full time or part time? For how long will that person stay away from work? Even if you are able to or decide to stay at home with the children, bear in mind that an extended absence from work, skills and training, could limit future career options, and therefore your lifetime earning potential.
Start saving for college
It’s not too early. Funding your children’s education is likely to be the greatest financial challenge we ever face. University education seems a lifetime away for your new child, but bear in mind that the costs of higher education continue to rise and the sooner you begin to save towards this, the better. Time is on your side. By starting early, you will have the benefit of a wider variety of investment and savings options to help you to achieve your goals.
With proper financial planning, budgeting for the baby, and saving from the start, you can welcome your new bundle of joy into the world without having to worry about your finances.
For more on all you need to know about preparing for baby’s arrival, visit the Expectant Mums Category