Saving Strategies: Financial Advice for New Parents
Having your first baby can be a lot like visiting a foreign country. You may feel sluggish or uncertain and end up spending more money than you planned. That’s why it’s so important to get advice from those who’ve already been there—experienced parents.
We talked to a few financial bloggers and parents who’ve been around the block. They shared some of the most significant financial adjustments they made to their daily lives when they welcomed their little ones. Their advice may surprise some expecting parents.
Financial planner and author Shannon McLay at financially-blonde.com advises future parents to start living like you have an infant as soon as they find out they’re pregnant. “First, sit down and think about what your expenses will be and budget for them: everything from childcare to ongoing supplies, healthcare costs, college savings, etc.,” McLay says. She suggests couples set that total amount aside each month in a savings account. “This will not only get you in the saving habit, but it will provide a nice nine- or 10-month cushion before the baby arrives.”
Donna Freedman, who blogs about finance and frugality at Surviving and Thriving, has an adult daughter who also blogs about money matters. Donna suggests creating a college fund before the baby is born and automating regular weekly or monthly payments into it. She offers up this creative method for saving as kids grow: “Save your child’s age per week. When she/he is a year old it’s $1 per week, the next year $2 per week, and so on. Over 18 years it can really add up.” Freedman also suggests getting relatives and friends in on the act, too. “Tell them that a kid can play with only so many toys at a time, whereas a contribution to the education fund will benefit your child for life,” she says.
Parenting and lifestyle blogger Chelsea Day of Some Day I’ll Learn has three young kids and warns that the cheapest deal is not always the best option. “We bought a compact car when we had our first baby and are now wishing we’d sprung for a van right off the bat. Our family has outgrown that vehicle and now we’re facing another car purchase just three years after the first,” she says.
Nicole Fisher, of Nicole’s Nickels, is the mother of toddler triplets, so her family went from two to five in just three minutes! “Expenses like formula, diapers and wipes were huge and it would have been easy to get into debt. I decided to stretch our dollars as far as possible and signed up for all of the store email and loyalty programs so I could shop around for the best prices on our staples,” she says.
Many experts agree that taking baby steps now can help ensure financial success in leaps and bounds in the future. These are just a few of many helpful strategies employed by parents and experts who’ve been there. With a little creativity and preparation, any new or expecting parent can alleviate some of the inevitable financial stress that can coincide with the joys of having a baby.