Starting a family is one of the most exciting times in life! It also brings a lot of changes and responsibilities, especially when it comes to your finances. As you get ready to welcome your new addition, it's important to set your family up for a strong financial future.
Plan ahead for parenthood with these money moves:
#1: Build a baby budget
It's no secret that having a baby will change your budget. Knowing what expenses to expect will help reduce the impact on your finances! One big question to consider is how your income will change after your baby arrives. For example, do you or your partner plan to work fewer hours or even leave a job? If this is the case, a smart approach is to adjust your current budget based on what your income will be in the future. If you're worried about making your budget stretch, here are a few things you can do:
It's no secret that having a baby will change your budget. Knowing what expenses to expect will help reduce the impact on your finances!
One big question to consider is how your income will change after your baby arrives. For example, do you or your partner plan to work fewer hours or even leave a job? If this is the case, a smart approach is to adjust your current budget based on what your income will be in the future.
If you're worried about making your budget stretch, here are a few things you can do:
Check out these easy-to-use financial worksheets to create a monthly spending plan that works for your family.
#2: Be strategic about baby gear
It can be hard to resist splurging on every adorable baby outfit, toy and nursery decoration you see. But you can save a ton by purchasing or borrowing pre-loved baby items from other parents—especially clothes. Kids grow fast! You might find that you don't even need certain “essential" baby items, like a wipe warmer, multiple pairs of baby shoes or the latest high-tech monitors. You can always save pricier items like the stroller, crib and car seat for your baby registry. Friends and family members may chip in to cover these big-ticket purchases!
It can be hard to resist splurging on every adorable baby outfit, toy and nursery decoration you see. But you can save a ton by purchasing or borrowing pre-loved baby items from other parents—especially clothes. Kids grow fast!
You might find that you don't even need certain “essential" baby items, like a wipe warmer, multiple pairs of baby shoes or the latest high-tech monitors. You can always save pricier items like the stroller, crib and car seat for your baby registry. Friends and family members may chip in to cover these big-ticket purchases!
#3: Boost your emergency fund
As you prepare for parenthood, now is the time to pad your emergency fund with extra savings. An emergency fund provides peace of mind when “life happens," whether it's car problems, medical bills, home repairs or other unexpected expenses. Setting aside money now to boost your emergency fund ensures you'll have a financial safety net when you need it! Try to save up at least three to six months' worth of living expenses in an easy-to-access account, like a high-yield savings account or money market account.
As you prepare for parenthood, now is the time to pad your emergency fund with extra savings. An emergency fund provides peace of mind when “life happens," whether it's car problems, medical bills, home repairs or other unexpected expenses. Setting aside money now to boost your emergency fund ensures you'll have a financial safety net when you need it!
Try to save up at least three to six months' worth of living expenses in an easy-to-access account, like a high-yield savings account or money market account.
#4: Plan (way) ahead
When you first become a parent, financial goals such as sending your child to college or saving for retirement can seem light-years away. However, it's never too early to start planning to have financial flexibility and freedom for your family! You can start a 529 College Savings Plan as soon as your little one arrives. This savings plan allows you to save for college costs tax-free. You can also open a dedicated savings account in your child's name to start saving for future expenses. It can be easy for new parents to put their own retirement plans on the backburner as they focus on their new bundle of joy. Just as you invest in your child's future, it's important to invest in your own. Try to continue setting aside funds for your nest egg, even if it means cutting back on some optional expenses now. Your future self will thank you!
When you first become a parent, financial goals such as sending your child to college or saving for retirement can seem light-years away. However, it's never too early to start planning to have financial flexibility and freedom for your family!
You can start a 529 College Savings Plan as soon as your little one arrives. This savings plan allows you to save for college costs tax-free. You can also open a dedicated savings account in your child's name to start saving for future expenses.
It can be easy for new parents to put their own retirement plans on the backburner as they focus on their new bundle of joy. Just as you invest in your child's future, it's important to invest in your own. Try to continue setting aside funds for your nest egg, even if it means cutting back on some optional expenses now. Your future self will thank you!
Get financially ready for baby and beyond
Being a new parent is stressful enough. The last thing you need is money stress! By planning, budgeting and saving well in advance, you can focus on what matters most: enjoying life with your little one.
Wright-Patt Credit Union (WPCU) is here to help you through every stage of life, including starting or growing your family. Be sure to check out our online Education Center for more helpful tips, tools and resources as you prepare for parenthood.