Babies are cuddly, cute and costly! Most people don’t realize just how costly caring for babies and kids, in general, are until they become parents themselves. From daycare costs to diapers, things rack up pretty quick. In countries like Nigeria where you can get cheap help and are surrounded by family, childcare is reduced. But for most folks who live in the Western world, childcare accounts for a huge chunk of your income. So just how do you get ready for your new bundle of joy in the most financially savvy way?
Open a savings/investment account
Here in the US, we have the luxury of a tax free college savings account that lets parents save up for college for their kids. Seeing the growing costs of college, this is an amazing invention. One of the first things my husband and I did when we got married was open one of those and fund it monthly. From living and working in Nigeria for the first 25 years of my life, I know many banks also offer the option of savings account for kids. When folks give you checks as gifts to welcome the baby, cash it. Then save the money in the savings account. This serves two purposes – instills a savings culture in your children and helps you cover some big upcoming costs for your kids.
Budgeting
The news of a new baby is exciting and can cause new parents to go overboard on purchases. Setting up a budget will help you greatly prioritize your expenses. Do you really need that expensive brand new stroller or will that hand me down from your neighbour work just as well? Babies tend to need not as much as we think they need. They also quickly grow out of clothes so unless you are planning on reselling your baby gear and other stuff, set a budget and stick to it.
Get Health Insurance
We all pray and want healthy babies. But there will be some unavoidable health expenses like immunizations, annual checkups, teeth cleaning. If you already have health insurance, call your insurance company. Give them a heads-up so they can put you through the process of how to put your baby on your plan. If you don’t have health insurance, get one as soon as possible to ensure you and your family are covered.
What financial changes/ steps have you taken to prepare for a new addition to your family? Did you feel sufficiently prepared financially for your child’s arrival?