We should all aim to build strong financial skills at every age and every stage of our lives – but when you’re a new parent, the importance of money management reaches a whole new level. While having a baby is first and foremost a wonderful and exciting moment, it also comes with additional costs and a new list of financial concerns for the future.
The sudden changes to your lifestyle and household needs can come as a shock, so if you’re pregnant, planning to have a baby or already juggling the financial needs of your newborn, check out these money tips for new parents.
Tackle Debt, Before the Due Date
With a new baby on the way, you’ve likely got a million things on your mind. It can feel way too distracting to even think about paying down debt, but in reality, this is exactly the right time for soon-to-be parents to pay off credit card bills, student loans and any other outstanding payments that are putting you in the red. Sit down with your partner or on your own and list out everything you owe, then develop a step-by-step plan to paying it off. Maybe you can make a lump sum payment ahead of schedule, or consolidate loan debt for a lower interest rate.
Handling debt can be challenging, especially for new parents, so get in touch with a free financial counsellor if you need help.
Check Insurance and Tax Terms
There will be plenty of fun and games when baby is born, but in the meantime, don’t forget to tackle the boring stuff like checking in with your insurance provider to see what’s covered for baby’s healthcare needs. Having a newborn will mean regular trips to the doctor for shots and tests, plus late-night emergency room visits for a fever are hardly unheard of. Chat with your provider about what to expect and see if it makes more financial sense to boost your coverage now, so you don’t get stuck with emergency medical bills later on. Taxes are another less-than-exciting topic when it comes to preparing for a newborn, but the good news is that parents get tax breaks – so be sure to look out for rebates and credits you’re owed when tax time rolls around.
Gift Your Baby a Budget
One of the best gifts you can give to your baby is the gift of a budget! As new parents, having a budget will mean more financial stability for your family in the short term and for years to come. If you don’t already have a household budget, check out some apps or online tools to find one that works best for you. Get a handle on planning incoming and outgoing expenses, and make a real commitment to stick to your budgeting promises. With good budgeting skills, you’ll be more equipped to provide experiences and opportunities to your kids, and you’ll be able to teach them financial skills from a young age that can make a big difference to their own lives when they’re grown.
Create a Savings Cushion
As a new parent, you’ll quickly learn to expect the unexpected. Having an infant, or indeed a child of any age, means that every day brings another surprise – whether it’s a field trip to the aquarium or a need for new soccer shoes. In any case, it’s important to be prepared. If you don’t already have an emergency savings account, check in with your credit union or bank about how to start one; and commit to only withdrawing from this account when you really need it. If you do have a savings account with emergency funds set aside, review what’s in there and decide if it’s enough to cover all the new happy surprises coming soon.
Commit to the Thrift
Clothing, bottles, pumps, crib, stroller, toys, diapers and so much more: Feeling overwhelmed at the size of your new baby shopping list? It’s time to commit to the thrift! Second-hand stores are a great place to find reasonably priced, quality baby items, and of course you can ask friends and family if they’ve got any hand-me-downs – chances are, they’ll be happy to clear some space. Most importantly, consider what your newborn actually needs. While it’s tempting to purchase a brand new collection of adorable onesies, just remember that when it’s 3am, your baby’s clothing design will be the last thing on your mind.