Expecting A Little One? If You’re Money Smart, Expect To Budget, Too
Planning Ahead With a baby on the way, expecting parents always have great expectations.
But overspending without budgeting often accompanies all the enthusiasm, and that can spell trouble. That’s where sound personal money management comes in. It can make for a happier, more secure home when the baby arrives, and as the baby grows. Here is some budgeting advice for new parents.
Bring wise spending to life, too
Initially, plan your spending around the first few months after your child’s birth. Think real needs and you can avoid dishing out too much on unnecessary baby bells and whistles. Create a shopping list of items in order of importance based on what you can realistically afford. Remember that wee ones could care less about “lifestyles” or “designer labels” and require mostly just love and nurturing. As kids quickly grow, clothes, toys, and fancy gewgaws soon fall by the wayside.
Put the baby’s needs into the framework of the gifts you might get from others. Don’t hesitate to tell family and friends exactly what they might buy for your child. After all, who needs a dozen baby blankets and a crib full of rattles? Also, consider how maternity leave — averaging 44 weeks for mothers, according to Statscan — will affect family finances. Look into the subject and potential paid benefits for expecting parents by visiting the Service Canada website and searching “maternity leave.”
Budget with the full baby picture in view
All of the above should fall within a written, monthly household budget covering your family’s spending and income, again putting needs before wants so you know your limits. Take into account short, medium, and long-term life goals for the baby and the whole family. Check out the online tools that can help you track spending and follow a budget if you aren’t already doing so.
In essence, your monthly budget—premised on life goals—involves the following:
- A full list with a total for fixed family expenses
- A full list with a total for variable family expenses
- Calculation of the above against net (after taxes and deductions) family income
- Arrival at a sum total for monthly discretionary spending
Grow happily through long-term planning
Budgeting should include vital needs such as life insurance and perhaps extended health insurance. With your child’s future in mind, put a high priority on savings and investments. Consider starting a Registered Education Savings Plan (RESP). This way, for instance, you can get a big jump on college and university costs, which continue to skyrocket.
Think about opening a bank and a savings account for the baby, too. Over time, a child’s savings can really fatten through your contributions, perhaps through later contributions from your child, gifts from family and friends, and through compound interest.
If you’re up against it, be resourceful
For expecting parents who may be challenged financially, frugality is a must. Be resourceful. Clothes, accessories, toys, etc. can be had through hand-me-downs from family and friends, or through visits to swap, consignment, and discount stores or online exchanges. Meanwhile, bulk buying and batch cooking can keep your little one affordably well-fed.
Don’t be shy to ask anyone about free and low-cost goods. Just smile and say you’re budgeting for the little one on the way.