Soon-to-be parents have a lot of planning to do before their new baby arrives. And one of the most pressing concerns new moms and dads focus on is how to get their finances in order to adequately prepare for the newest addition to their family.
Building a healthy financial framework involves several aspects, such as eliminating debt, padding a savings account, building an emergency fund and developing a baby budget. These four steps can be daunting at first, especially when added to the mix of making other baby preparations. But working with a credit counselor and disciplining spending can help new parents take the appropriate steps to accomplish their financial goals.
First, it’s important to cut down on any unnecessary debt, such as credit card balances and personal loans. Freeing up more income by eliminating high-interest debt can give parents the resources they need to both purchase baby necessities without turning to credit and bolster their savings fund. Credit counseling services can help adults develop a repayment plan that allows them to balance their resources between these two goals.
Creating a pre-baby budget is also one of the most effective strategies to striking this balance, according to MSNBC. A household’s budget may change from month-to-month based on their particular circumstances, so parents may benefit from creating a pre-baby money management plan that caters to debt, emergency savings and covering the costs of necessities, the news source explains.
Parents should factor in the costs of hospital expenses, baby necessities and day-care. Realizing how much they will spend on a monthly basis before baby actually comes will give parents a good idea of how much they should be saving.
In addition, parents can save money on baby items by only purchasing what they need to get started, rather than the most popular and expensive accessories. Individuals may receive most of what they need during the baby shower and other items can be purchased at more affordable costs by avoiding big-brand baby stores and focusing on the basics. This will allow adults to provide their newborn with what he or she needs while devoting more money to saving for their family’s future.
It may take adults some time to reach their ultimate financial goals, but developing a step-by-step plan and working with a professional can bring new parents closer to their overall aims.