Maybe you just found out, or maybe you’re a few months in. No matter how long you have until the due date, you know your life’s about change in big, wonderful ways. You know you’re ready as a parent, but what about your finances?
Raising a little one has its own rewards and challenges, but financially affording a new addition to your family shouldn’t have to be one of them. Fortunately, you don’t have to be a millionaire provide; like any long-term investment, a little bit of planning will pay dividends for years.
Determining Your Costs
Every child is unique, but one wonderful thing about modern data is that you can have pretty good idea of how much money it’ll take to provide for your child from diapers to diploma, right now.
But in particular, we recommend an online calculator like this one to help you tackle one of the most confusing periods for first-time (and second and third time!) parents: the First Year. Those first twelve months can be a whirlwind of unexpected expenses, but a good calculator accounts for most of them (and even gives good insight into post-secondary education savings).
The first year is a good benchmark for what you expect in the coming years, too. Of course, as they get older, you’ll see some expenses go away – childcare or special food, for instance. Additionally, if you have or plan to have other children, you may be able to combine some expenses, like hand-me-downs, combined nanny services, or buying groceries in bulk. But you’ll also see new expenses like extracurricular activities, vacations, and more. It’s always good to overbudget and have leftovers!
Adjusting Your Finances
Once you’ve figured out how much you can expect your household expenses to increase, it’s time to make sure that you can meet them. The good news: you’re guaranteed at least a tax credit on your existing income to help you defray your costs, as your little one will count as a dependent.
Now may also be the time to consider relocating your family, whether to a quiet, more affordable rental situation in the suburbs or even to purchasing a home where the home payment is a little less than your monthly rent (plus, you’ll be building equity!).
You’ll also be able to snap up good deals to help defray anticipated costs; seasonal sales on clothing, for instance, or bargain-hunting at garage sales in the summer. Family members are also wonderful sources of hand-me-downs and gently used baby furniture and accessories, from strollers to cribs.
Make Sure You’re Using Your Benefits to the Fullest!
Today’s professional world isn’t your parents’ professional world – and that’s a good thing. Many jobs are beginning to offer paid maternity/paternity leaves as well as other perks for expectant employees, and knowing you’ll need them well in advance can help your coworkers plan around future absences while leaving you financially secure as you welcome the new family member.
You’ll also want to know every single benefit of your health plan and how it can pay for those important first-year medical appointments and doctor visits; now’s a great time to find out and plan ahead so there’ll be no insurance surprises come that first sneeze.
Finally, don’t be afraid to tie your new family member’s arrival in with a job search. If you’ve got a few months and you’re confident you can be comfortable in the new role by the time the due date rolls around, take this drive to help fuel your interviews for jobs that better meet your professional goals – and whose benefits might provide more for your growing family.
From powerful financial solutions that make for perfect college funds to everyday checking accounts for all those diapers, Highlands Community Bank is no stranger to helping new (and old) parents enjoy financial security for themselves and their loved ones. Visit one of our branches to talk about what we can do to make these next nineteen years wonderful.
Leave a Reply