Caring for your new baby means making changes to your personal life – and not just of the diaper variety. You’ve got a little person living in your house now, someone who depends on you for everything, and that means you’re going to have to learn how to work on a very tight schedule. At the very least, it means fewer nights at the bars and more afternoons at the playground. Financial planning, too, is more important than ever. After all, you’ve got a college fund to fill up, and that checkbook isn’t going to balance itself. So how do you find the time to handle these tedious tasks? You follow these tips, of course. Here are 5 ways new parents can manage their finances without losing their minds.
1) Take advantage of your work benefits. In addition to family health coverage, many jobs have benefits in place to make parenthood a little bit easier on new moms and dads. For instance, your workplace may offer a dependent care account that allows you to shelter up to $5,000 from taxes. That can help make the costs of childcare a little easier to bear. You might also be able to get a discounted rate on daycare through a company affiliate. Since these benefits vary by employer, it’s up to you to research and take advantage of the help your job can provide.
2) Pick a day to pay the bills. You’d be surprised how easy it is to miss one of your credit card payments when you’ve got a baby in the house. Though it doesn’t seem like much, just one missed bill can do serious damage to your credit score, so keep yourself organized by picking one day a month to pay all of your bills – credit card, power, cable, heat and everything else. By getting into a routine with your payments, you can make sure nothing gets lost in the fray.
3) Start budgeting for the future. According to BabyCenter’s handy calculator, raising a child to age 18 will run the average family about $150,000 – or $230,000 if you’re planning on paying for college as well. That’s a lot of money, especially when you consider that you’re also supposed to be saving money for retirement, so it’s important to make a budget early on and stick to it. Lay out all of your expenses – from the mortgage to groceries and entertainment – and find ways to divert money to your savings. It won’t be much fun, but the earlier you start saving, the earlier you can kick back, relax and enjoy a comfortable retirement.
4) Hold off on the menagerie of baby toys. If you think about it, you really don’t need all those binkies, bottles, bibs, bouncers and clothes that you bought. Its standard practice for new parents to shower their kids with an array of expensive gifts, but the truth is that the baby is really going to only be interested in – and really only needs – a handful of those items. To avoid accruing a bunch of expensive paperweights, try to get hand-me-down clothes and toys from your family and friends. That way you’ll have more money to spend on diapers. You’ll need a lot of those.
5) Get a rewards credit card. You know what’s going to cost you a ton of money now that you’re a parent? Gas and groceries. And what are some of the best rewards a credit card offers for new parents? You guessed it – gas and groceries. You can get 2%-3% cash-back on these necessities with a rewards credit card, so if you don’t have one yet, then it’s time to start filling out applications. It might not seem like much, but after a few years, that cash can add up to a family vacation – or at least a sweet Christmas present for your child.
Raising a child isn’t easy, but if you use these tips to keep your finances in order, the journey isn’t going to bankrupt you, and you’re not going to end up babbling in the street. Just remember to save money whenever possible, and always look for new ways to reduce your spending. If you do, the big cost of child-rearing will be a lot easier to bear. And when you’re taking care of a baby, “easy” is a hard word to come by.
Money Saving Parent offers a big thank you to Bill Hazelton of CreditCardAssist for providing this helpful article on parenting and money.
Bill Hazelton is the founder and CEO of CreditCardAssist, a leading pro-consumer credit card resource. Since 2004, he’s been providing American consumers with all the tips, tricks and news they need to navigate the world of personal finance. His on-site reports have been cited by the San Francisco Chronicle, the New York Post, Yahoo! News and more.