Financially Preparing For A Baby
Having a baby is a joyous occasion that can be very exciting. However, it can also be a learning experience as a parent to learn how to be prepared for the baby. This includes being aware of expenses and knowing how to create a baby budget. Babies can be costly as they need many things to clothe them, feed them, and keep them safe and healthy. In order to be financially prepared, parents need to create an effective budget to be able to have more time to enjoy their new baby.
Knowing Your Monthly Income
Part of creating a budget is knowing your monthly income. First, you need to determine your income. This can be confusing, as you may see your gross income on your paychecks. You might be thinking, “What does gross income mean?” Gross income is the amount of money earned before anything is taken out. Things that are taken out include taxes and employee benefits. What you need to focus on is the amount that you earn after everything is taken out. This is the amount that gets deposited to your bank. Then, you can calculate your monthly income by multiplying by 4 if you get paid weekly or by 2 if bi-weekly. Make sure all income is figured in from both parents.
After determining your monthly income, you need to subtract all monthly expenses. This includes car payments, mortgage, car insurance, loan payments, electric, and anything else that has a fixed amount that is taken out every month. Then, you need to consider expenses that might fluctuate, such as the amount spent on groceries, gas, entertainment, etc. Once you determine the amount you have left, you can begin to think about how much your new baby will cost. This can include one time payments, such as medical bills for gestational care and delivery. This can be hard to determine, as it can depend on insurance. However, you can ask your obstetrician to give you an estimate. You might also want to consider any time from work that will be unpaid for both parents. Other one time costs can consist of the following:
• Breast pump
• Baby monitor
• Baby swing
It is important to remember that these costs can fluctuate on what you spend on these products. Knowing what you have to spend can help when shopping and finding good deals. Costs that will be ongoing include doctor visits, child care, clothing, formula, diapers, and wipes. Again, these things may be hard to calculate, but it is a good idea to think about putting money aside right away. It is also important to begin setting aside money for the future, such as life insurance, retirement, and college funds.
Finding Other Ways to Increase Income
Sometimes, there just isn’t enough money to cover all expenses. Or, you may want extra income to use for extra things, such as a date night, vacations, or hobbies. There are many ways to make extra money. The following is a list of ideas to get you started:
• Sell unwanted items or items that you no longer need
• Take surveys online
• Pick up side gigs such as dog walking, grass cutting, driving for Uber, house sitter, etc.
• Become a freelancer
• Sell crafts
• Write a blog
• Eliminate or downgrade packages, such as Cable or internet
• Cut coupons
• Use rebates or find cash back deals
• Consider consolidating loans or debt
Once the baby arrives, the last thing you want to do is think about money. It is important to prepare and budget beforehand to eliminate this stress. Afterall, bringing a baby into the world should be an exciting and joyous experience.