(Posted by a guest blogger, Richard Thomas) One of the happiest occasions in a couple’s life is the day they are told by the doctor that they are pregnant. At the same time, it can also be one of the scariest. All of the sudden the couple realizes that from this moment on, another human life is dependent on them.
One of the first things that the couple begins to think about is the cost inherent in this undertaking. To relieve some of the potential stress, every couple should budget for having a baby.
- Start Saving after the Wedding
If a man and woman know when they first get married that they both want children; they should start a savings account for having the baby immediately. They can put aside money monthly to cover the cost of diapers, food, and other necessities. By starting early, they can concentrate on the joy of having a baby and not the stress that failing to plan brings. This also ensures they are well prepared for any needs that may come about in the first couple of years.
- Add Baby Expenses to your Spending Plan
When you are expecting a baby, adding their expenses to your spending plan can be a great way to ensure that all the baby’s needs will be met. Visit your local stores and get prices for all the baby items that you will need on a regular basis and add these expenses to your monthly spending plan.
This will help you to begin living without that portion of income. Try using the Envelope Method to save those additional funds. This works by placing the money for the baby’s essentials in an envelope each month, which removes it from the other spending money you have in the bank. It allows you to see whether you can comfortably live without the money. If not, then the next step is to begin cutting back.
- Cutting Back
Many families find themselves needing to cut back in order to accommodate the birth and care of a new child. This is especially true, if the mother will have to take a long leave of absence from her job in order to care for the baby. Depending on the amount of her income, this could leave a large gap in the budget.
To fix this situation begin reviewing the budget; anywhere you find overspending occurring, determine if you can at least cut that amount in half. Once you have decided on the expenses you can pare back, again place that money either in an envelope or another account and see how well you live without it.
One of the quickest ways to improve the family’s financial picture is by transitioning to a simple living lifestyle and cutting back. Even if the amount doesn’t replace all of the mother’s income it can significantly assist in giving her the time off she deserves.
- Pay Off Debt
It is always a great idea to pay off debt. Just taking this step can reduce the output of income from the family budget. This can make it a lot easier to plan for the baby. By becoming debt free; you can ensure that you are ready to have a child and can pay for the upcoming expenses. This is also helpful in planning for childcare needs if mom decides to go back to work. You will not only feel great about getting out of debt, but you will also be setting an excellent example for your new baby and someday your young man or woman.
Budgeting for a baby should not bring about anxiety or fear. If you start early you can avoid many of the potholes that so many families endure. By starting to save immediately after the wedding, adding baby expenses to your spending plan, cutting back on unnecessary expenditures, and paying off debt; you are guaranteeing your child a bright and plentiful future.
* Photo Courtesy of Pinterest
Richard Thomas who is a guest blogger has a personal finance blog, Simple Living Australia. He is a father of 1 and enjoys providing financial tips and information for those looking to get ahead.