Managing everyday expenses is a challenge overall. Staying in line with the budget, reducing credit card debt and working towards financial stability become even more challenging when you have a precious little addition to your family. Here are a few ways to navigate the new financial needs and challenges of your growing family.
Managing Everyday Expenses with a Newborn
A newborn in the family is daunting emotionally as well as financially as a new parent. Fox News provides some insight into the costs of raising a child:
According to The Department of Agriculture, the estimated cost of raising a child from birth through age 17 is $233,610, or as much as almost $14,000 annually. That’s the average for a middle-income couple with two children. It’s a bit more expensive in urban parts of the country, and less so in rural areas. This estimate is based on 2015 numbers, so a baby born this year is likely to cost even more. It’s a 3 percent increase from the prior year, a hike higher than inflation.
Becoming a parent forces you to deal with financial complexities that you did not anticipate. In addition to expenses such as diapers, milk, and clothing, there are numerous types of unexpected costs. With a baby, everything you see is cute and cuddly. The trick is not to fall into the pitfall of buying everything. Therefore, planning financials for a baby need to begin from the day you are expecting. This, in turn, can help you avoid personal credit card debt.
Managing Everyday Expenses – Tips & Tricks
Start Planning Early
From the day you find out you are expecting a baby, you need to start adjusting financial goals. From then on, your financial goals should include things like saving for their college tuition, a more aggressive retirement savings plan and all the other everyday expenses. Managing everyday expenses should be looked at more rigorously and must be kept on a tight leash. Maybe it is time to cut down on the entertainment budget a little bit now to help accommodate what’s about to come!
The next step contains making a lot of lists. That is something that worked for me personally: Everything was a list! The number of clothing items, shoes, crib sheets, burp cloths, cotton buds and more. Include everything as much as possible in a list. As much as you want to buy everything in the store, the one thing I learned, is that babies grow out of things in the blink of an eye. So, if you are fortunate to receive some hand me downs welcome them with open arms.
Baby stores typically give great discounts for baby registries. Make use of them. If you have to shop in multiple stores, create a registry at each of the stores and make use of the discounts. You will also receive multiple savings coupons. Never throw them away; they come in handy more often than you think.
Don’t Forget Hidden Costs
With a baby comes a lot of long nights! That means your heat settings will have to change, your lights will be on longer and other electricity-consuming equipment such as bottle warmers and sterilizers will be in use. Therefore, make sure you factor that into your utility expenses. Additionally, there will be plenty of unexpected medical expenses for the baby and maybe even mom getting checked out post delivery. That could mean a lot of co-pays, time off work and gas. If you have other kids at home all these unexpected visits can bring up your babysitter costs as well.
Automate Your Debt Payments
In the middle of all the chaos, cuddles and kisses you are bound to forget something in the mix. And that should not be your debt payments. If you have a goal of getting out of debt fast, missed payments can hinder this process. Therefore, make sure you have reminders set to make these payments and or automate your payments.
Managing everyday expenses must be taken seriously on all counts. Having a baby [Or in my case two :)] is an exciting and overwhelming time of your life. And you do not want to make it even more complicated by a disorganized financial life.