4 Financial Tips for New Families | Tales of a Ranting Ginger

4 Financial Tips for New Families

Starting a family is one of the most enriching chapters in every married couple’s life.

But as name ideas, gifts, and heartwarming wishes from friends and family trickle in, you can’t help but ask yourself:

Am I really ready for the responsibilities of parenthood?

In this post, we’ll tackle some of the best financial tips that will grant would-be parents the peace of mind they deserve.

Let’s jump into it.

1. Start Tracking Your Expenses

Before pregnancy, you can definitely live comfortably without tracking how much you spend each month.

As a matter of fact, you’re probably used to enjoying numerous romantic dinners, movies, and vacations. But now that you’re expecting a new family member, all these wasteful spending habits need to go.

Start tracking your daily expenses and figure out which ones should be shaved off. These should consist mostly of discretionary expenses, such as movie tickets, expensive coffee, jewelry, and new gadgets.

Of course, this doesn’t mean you shouldn’t have funds for recreation altogether. Your only goal here is to make sure your monthly budget can support your child’s needs, such as:

  • Regular check-ups
  • Diapers, wipes, topicals, etc.
  • Baby furniture
  • Baby utensils
  • Daycare or Babysitter

2. Build a Financial Cushion

Now that you have expenses out of the way, it’s time to take more aggressive steps to secure your finances.

Think about it this way: you still have 9 months to build a cash cushion for your new family. Use them wisely and make sure every penny counts for the sake of security.

After you record your expenses, set aside a percentage of your income as your “baby funds.”

Remember, the average cost of pre-natal care in the USA is around $2,000 if you don’t have insurance. Based on your combined income, calculate the percentage you need to save each month to match or exceed this cost.

3. Think Way Ahead

When it comes to your child’s future, you can never be too prepared.

You need to embrace every opportunity that will help them overcome financial roadblocks.

For example, when it comes to student loans, take advantage of comparison tools to find the best offer that matches your goals — be it to get out of debt faster or maximize your student loan savings.

Of course, you can also consider a 529 savings plan, which is tailored to help parents prepare for the costs of college education.

4. Update Your Insurance Policies

If you’re currently paying for life or health insurance policies, you presumably have designated your spouse as the primary beneficiary.

By the time your baby arrives, you need to start thinking about whether or not to add them to your policy.

It may sound like a grim thought, especially when you should be optimistic about your growing family. But as a parent, you always need to look out for your children — even when you’re not there anymore.

While you’re at it, it’ll also be a good idea to update your last will, if you already wrote one.

Conclusion

Preparing for a new family member isn’t rocket science.

After you figure out where you stand financially, it’s all about your discipline and commitment to the right strategies. Hopefully, the ones above are enough to help secure your family’s future.

Good luck and congratulations!

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