Starting a family is exciting and life changing, so you need to be financially prepared. Here are some moves to make before your first child is born.
Starting a family is a milestone for many. Your life changes and so do your finances. And even in this exciting new stage of life, there are some things you need to consider before your first child is born.
1- Change your budget
So, this might sound obvious but it is not. If you already have a budget, you need to update it so it accommodates your growing family. Adjust your goals and see how this modifies your expenses. Include any potential cost that might come along with the baby, such as childcare.
This might also give you the possibility to cut down costs that no longer seem necessary, like dining out every other day. Develop a realistic budget so you can plan accordingly.
2- Build an emergency fund
According to the USDA, the cost for raising a child is almost $250,000. So it’s probably a good idea to save up for an emergency fund before having your first child, as it will be more difficult to do so once the baby is born.
Increase the amount of money you are currently saving. A good starting point is to have at least three to six months’ worth of expenses saved before your child is born.
3- Consider Maternity Leave
You or your partner are likely to take some time off work once the baby is born.
This might affect your income, so you need to have a plan. Whether it is making extra hours to compensate for the time in which your income will decrease or to find ways to make some extra bucks, remember to consider this as a part of your budget.
4- Start buying supplies early
It is a good idea to stock up on baby supplies and gear a few months before the little one is born. Even more, if you plan a baby shower a bit earlier than usual, you might have a better idea of what things you need to buy and what things you don’t.
5- Minimize debt
Being in debt can be hard when you are trying to start a family, so try to minimize it as much as you can, if not all. Having less debt will also allow you to save more money.