For many couples it is not long after they are married that people start to ask, “So, when are you going to have a baby?” or in-laws start asking “When are you going to give me a grandchild?” According to government estimates, the average middle-income family will spend roughly $10,000 on child-related expenses in the first two years of life*, so your answer may be “When we can afford one.” But does that time ever really come? It can when you use a little bit of planning, just like many of us plan our pregnancies. But then again it’s never too late to start budgeting for that baby, even if one is on the way and budgeting for baby may be one of the best ways that budgeting can save many of the financial pressures in a marriage.
Preparing for pregnancy
Whether you are thinking about getting pregnant or it is already here, there are few steps you can start to take to budget for those baby expenses. Be sure to talk to your insurance company and know what your benefits are. Ask your doctor and hospital about a payment plan, because it is a whole lot easier to send them a check (without any interest charges) than it is to get charged even more for using your credit card. Some hospitals and doctors will even negotiate a lower rate in some circumstances, so remember it never hurts to ask if that is an option. Consider the implications of time off work for doctors visits, maternity leave, and while we hope it doesn’t happen, extended leave from work due to your pregnancy. Find out about the Family and Medical Leave Act.
Basics for baby – new is nice but you don’t need to pay twice, as much
There are a number of ways you can budget for baby both before and after your little bundle of joy arrives. Before, consider a “swap and shop” with other friends who may have already had a baby. Consignment stores are also a good source of baby products, but make sure to do your research on recalls and safety issues before you make any used purchases. ”Hand me downs” are a great resource, so don’t be afraid to ask for them or accept them. Babies grow fast and some of my hand me down clothing still had tags on it. Looking for church and community sales in your area (like a great big consignment/garage sale) to help you find baby basics on the cheap.
Some of the most expensive baby items are diapers, formula and child care. When you are budgeting for baby consider whether or not “doing it yourself” is possible. Could you breastfeed, even if it is just some of the feedings? Could you use cloth diapers (they now are so easy and can save approximately $500 or more a year, especially if you purchase the adjustable sizes)? Is staying home a possibility to save on daycare costs? Or is there someone you could trust to watch your child at home without the expenses of a day care?
Savings and Samples
Start as soon as you can collecting savings and samples. You can find free samples of diapers, wipes and formula and yes many of them will still be good after baby arrives (for food and formula be sure to look at expiration dates). Coupons can make a bid difference in your money-saving efforts especially when it comes to diapers and wipes. Sign and save with many programs like Huggies or Pampers as well as Gerber. Doctor’s offices, hospitals, and pediatricians are also a good source of samples and products, on everything from Tylenol to Formula.
Need it now?
The inclination is to go buy everything all at once. But really baby will grow and so will his or her needs. Save your money and purchase things when they are needed, unless a purchase can save you big money in the future. That cute high chair will do nothing for the first few months but sit in the corner and need to be cleaned. Why put that on your credit card and pay for it before you can even use it, as well as pay interest on your purchase?
Now that you have the basics of budgeting for a baby busted, you can start to think about all those other important decisions about parenting like working, raising your children, saving for their college and GASP – yes even dating. Trust me, it will be here before you know it.
Information contributed by Genworth Financial