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Are You Financially Ready for Your New Baby?

By Pamela L Wilkins for LIFELines

So, you're having a baby. Congratulations!

You are truly blessed to experience the gift of parenthood. It can be very rewarding and challenging as well. You have probably been warned about the 2 a.m. feedings, colic, and diaper rashes. And you've probably decorated the nursery, chosen a name, and even picked the preschool you hope to send your child to. However, have you taken the most important step of all? Have you prepared your finances for your new baby? If not, start now. Did you know that it costs $1.45 million to raise a child from birth through college? Parenting is very expensive.

The expenses of having a baby include childcare, food, clothes, diapers, healthcare, cribs, walkers, car seats, and college savings. (Don't put off saving for college. Your money will grow if you start now.) Expenditures quickly add up, making a need for a small nest egg essential.

Your immediate finances are also affected with the arrival of a baby. Who will be the primary caregiver? Will one of you become a stay-home parent? Can you survive on one income? If not, how will you pay for childcare? How will this affect your income? 

According to the USDA, it costs $2,840 annually to feed a baby. You can save a portion of this amount by breastfeeding. Many physicians agree that breast milk is healthier for babies. Whether you breastfeed or not, you may qualify for the Woman, Infants, & Children program (WIC). This can be a big help to your food budget. In the WIC program, you receive free cereal, milk, cheese, eggs, baby formula, etc.

You can stretch your dollars further by shopping at thrift shops for baby clothing. Save more by creating a clothing swap with your friends and neighbors, in which you exchange your used baby clothing for other second-hand clothes that your child needs. The Navy-Marine Corp Relief Society offers thrift shops, budgetary counseling, and a baby layette program.

Another way to cut costs is to create a babysitting co-op with your friends and neighbors. You offer to sit for other families within the co-op for a specific amount of time, in return, they do the same for you. Babysitting co-ops can lower childcare expenses, give parents the opportunity to socialize, and foster community spirit.

If you want to save even more, consider using cloth diapers. You can wash and reuse them or you can have a diaper service. Both ways are cheaper than disposables. If you don't like the idea of cloth diapers, then save by buying diapers in bulk. You can never have too many.

Here are more tips to help keep your finances in order when the baby arrives:

    Save $20 in a jar for every week of your pregnancy. By delivery, you will have a tidy sum stashed away.

    • If you want to become a stay-home mother or father, do a test run first. Cut expenses and live on one income. Save the other. You will see firsthand what it is like to have one income.

    • Pay off your debts. Credit cards can be detrimental to your financial health. The National Foundation for Credit Counseling has information on debt and personal finance. You can also reach The National Foundation for Credit Counseling at 1-800-388-2227.

    • Start saving for college now.

    • Finally, save 10 percent of your monthly pay for emergencies.

As a parent, you will not only be responsible for yourself, but for a helpless infant as well. Financial preparation allows you to relax and enjoy the blessed event.

Related Article: Resources: Are you having a baby?



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