If you just had a baby or are expecting a new baby very soon, it is highly likely that you find yourself lying awake at night worried about more than just your new infant. In fact, your budget is probably one of your biggest concerns, and with today’s economy, your worries are justified. Recent studies show that a middle-class family will spend more than $245,000 just getting the child to age 18. This does not even include the cost of college. For some families this figure can even double. Just imagine if you had twins. So, what does all this mean? It means that you need to get your finances and start budgeting smarter, but how do you go about doing this?
Establishing An Emergency Fund Beforehand
With a new baby there is likely going to be a lot of unforeseen expenses. For instance, doctor’s visits and medications can eat up an emergency fund quickly. This is why it is imperative that you start an emergency fund at least 3 to 6 months, before the baby is due. If you have not done this yet, your best options will be to start as soon as possible.
Reassessing Your Financial Goals
It is highly likely that you goals will greatly change when you have a child. The main thing is that you and your partner need to make sure that you both are on the same page, as to what you want to try and achieve in the future. Before the baby were you saving to put money down on house? Should that money now be converted to a college fund? The main goal is to make the decision that makes the most sense without stretching yourself too thin. If you have to put that new house or car on the back burner then do so, because your child should now be the most important financial goal in your life.
Devise a budget in advance, so you are financially and mentally prepared for the future.
Exploring Childcare Options
Recent studies show that childcare costs can exceed the cost of rent for most families. You and your spouse need to sit down and consider if it would be a good ideal for one you to become a stay at home parent, and if so, which one? Do you have another family member that can come over and help? Anything that can lower the cost of childcare expenses should be done.
Track Where Your Money Is Going And Create A Budget
Since your child has arrived, it is likely that your spending patterns have greatly changed. Everything is probably different than it was before. So, you are going to have to sit with your spouse and figure out exactly where you are spending your money and how you need to be spending it. For instance, it is now safe to say that your housing and utility cost is going to increase, since you are bringing a new member into the house. You are going to have to allocate resources for these expenses.
It might even be likely that it will take several different tries for you to stay within your budget. However, the main thing to remember is not to get frustrated and keep trying. By keeping track of everything in this manner, you will know exactly where you money is going and where you might need to make adjustments.
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