When you’re preparing for a new bundle of joy, there is a lot to do. Between baby showers and decorating the nursery, make sure you don’t forget to plan financially for your new arrival. Here is a checklist to help you get started.
Start shopping wisely. Stores are filled with items you can purchase for a new baby, but don’t be fooled into thinking you need them all. Before you go shopping for big ticket items such as a crib or stroller, research prices and reviews online. The most expensive, top-of-the-line items aren’t always necessarily the best.
Plan for your household income after the baby’s arrival. If one of you will be staying home or changing to a part-time schedule to care for your child, start planning ahead for how you will budget expenses on less income. Start living within that budget before the baby is born so you can make needed adjustments before you bring your little one home.
Estimate daycare expenses. If you and your partner are planning on working after the baby arrives, start researching daycare providers in your area. Contact the providers that interest you to learn about possible openings, what they offer and what price range you should expect to pay for care. ChildcareAware.org offers free resources to help you connect with childcare providers in your area.
Adjust your grocery budget. If your family is growing, your grocery budget will likely, too. Keep track of what you are spending now on monthly expenses and then begin planning a new budget for once the baby arrives. A USDA report estimates the average middle-income family will spend about $12,000 on child-related expenses in their baby's first year of life.
Consider starting a college fund. The sooner you begin putting money into your child’s college fund, the more time you’ll have for compound interest to work its magic on helping your money grow. Setting up automatic transfers or direct deposits from each paycheck can help make the saving process easy and routine.
Grow your own savings. When a new bundle of joy arrives, you’re bound to encounter some unexpected expenses. Start building a rainy day fund or add extra padding to existing savings accounts so you can be ready for life’s little surprises.
Update your beneficiaries. Once your baby arrives, it’s important to update your beneficiary information. Beneficiaries are the individuals you select to receive money or other benefits upon your passing. Many life insurance policies and retirement accounts will ask you to name beneficiaries.
Evaluate insurance needs. With a growing family, it may be time to re-evaluate your current insurance coverage to make sure you and your loved ones are fully protected. Contact your health insurance company to find out how to add your child to the plan. If you and your partner don’t already have life insurance, it may be a good idea to consider purchasing a plan. As the Insurance arm of Capitol Federal®, Capitol Agency can help you compare coverage from several carriers to help you find the most valuable policies for your family’s homeowners, auto and life insurance needs.
What financial tips would you share for new parents? Tell us here!
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Smart Spending
, Strategies for Saving
