Having a new baby is a very expensive experience – even if it’s also one of the best things that you’ll ever do. Babies need a lot of things to stay happy and healthy, from nursery furniture and new clothing to diapers and milk. There’s a good chance that your entire budgeting strategy will need to change when you welcome a new child into your family. The quicker you start making adjustments to the way that you spend, the better off you’ll be in the long-term.
So, how do you make sure that you can afford your new child without taking out countless loans? The best thing you can do is learn how to plan properly. While you might need a loan to pay for big expenses like a new pram or car seat, the right budgeting strategy will help you to keep your debt levels to a minimum.
Avoid Excessive Debt with a New Baby
1. List Out Essential Expenses
Don’t wait for your new child to arrive before you begin looking at your finances. As soon as you find out that you’re expecting, sit down with your partner, and make a list of all the expenses you’re going to need to think about. This will include a consideration of one-off expenses like furniture for the baby’s new room, and long-term costs like extra food and clothing.
Having a list of short-term and long-term expenses will help you to figure out what you can pay for using your savings or a personal loan, and what you’re going to need to pay for using consistent budgeting strategies.
2. Adjust your Budget According to Monthly Expenses
While a loan or a savings account can help you with initial costs like paying for a cot for your child, you’re not going to be able to rely on that money for everything. In the long-term, your finances are going to rely on your ability to budget. That means looking at your monthly expenses and thinking about what you can cut back on to free up extra money.
For instance, now that you’re expecting a baby, you may need to spend less money on takeaways and eating out with friends and spend more of your cash on emergency savings and food. Having a baby means making a significant change to your lifestyle.
3. Know What Kind of Help You Can Get
For families in the UK, there is a lot of assistance available to ensure that you can afford all the expenses of becoming a parent. With that in mind, it’s important to speak to an expert as early as possible for an insight into the kind of help you can get. For instance, you might be able to get child tax credits to help with your monthly expenses, or free childcare for so many hours a week so you can get back to work a lot faster.
Speaking to someone at the civic centre or advice bureau will ensure that you can begin applying for government assistance as soon as possible.
4. Understand Your Maternity Options
Speaking of assistance for new parents, make sure that you know what kind of support your employer offers when it comes to things like maternity and paternity leave. Different companies offer different levels of support depending on the career that you have. The kind of maternity leave you get will often dictate how you choose to spend the time you have after your child is born.
If you’re not sure what’s available to you at this time, consider speaking to your boss or HR team. Don’t forget to ask about working remotely for a while before you come back to work too – as this could be a great way to start earning money again before you leave your child.
5. Keep Costs Low on Baby Expenses
Finally, remember that it’s easy to get carried away when you’re buying new things for your baby. However, before you spend a fortune on things like toys and clothes, remember that it’s important to live within your means. Most of the time, you’ll be able to rely on friends and family to give you some of the items you need during your baby shower. You can also ask your loved ones whether you can borrow essential things that they’re not using when the baby arrives.
When it comes to getting extra products for your baby, don’t forget to check out second-hand stores and thrift shops for extra savings too.