Are you expecting an unexpected bundle of joy? You’re not alone. According to the CDC, 49 percent of pregnancies are unplanned, and unfortunately, not all parents are financially prepared. With just four mindful budgeting tips for a new baby you can start saving for your expanding family.
Raising a child is a beautiful and expensive endeavor. In the U.S., it costs over $245,000 to raise a child from infancy to an 18-year-old young adult. This includes housing (30 percent), childcare and education, (18 percent), food (16 percent), and transportation (14 percent), as well as health care and clothing. However, the estimated cost does not include college and university expenses.
Some of the most costly expenses in a baby’s first year are childcare, formula, diapers, and baby gear (including car seats, strollers, and cribs). In fact, in the first two years parents will typically spend over 10 percent ($25,980) of the total child-rearing costs. You can start saving for future baby bills by taking action now.
Listed below are four budgeting tips for a new baby to keep in mind
- Anticipate. The cost of raising a baby varies on your location and your income, among other factors. Use this detailed calculator to estimate how much money you may spend in your baby’s first year. And try using a special calculator to better anticipate what you might have to pay in the years to come.
- Plan a budget. Start reviewing your monthly expenses. How much can you save per month until the baby is born? What can you cut to create a little extra financial cushion before the baby’s due date? Set realistic goals and stick to your plan. It’s worth it in the long run.
- Investigate your maternity leave policy. Unfortunately, America is the only OECD country that does not offer paid maternity leave. And only 12 percent of private sector workers have paid family leave, so depending on your job’s policy you may lose wages during maternity leave. Check your policy and anticipate and plan accordingly.
- Buy secondhand. Strollers, highchairs, and cribs can all be costly items. Instead of buying new, try buying secondhand. Better yet, see if a friend or family member has any old baby gear that they’ll be willing to give to you. Even one secondhand or donated item can help lower costs.