For most new parents, focusing on the big picture isn't easy. You're sleep-deprived, juggling naps and feeding schedules, and excited about the new little person in your life. But milestones are on the horizon, and you'll want to prepare for them while keeping your own finances on track.
Here are six tips for new parents:
This can take away unnecessary stress and allow you to ease into your new lifestyle so you can focus on enjoying your new family member.
TD Bank offers key financial tips to help you get ready to start a family.
Understand your insurance and paid leave
A representative from your insurance company can help you understand exactly how much you will owe for labor and delivery costs. Contact them and get the information confirmed via email so there isnt a miscommunication. If you are married, review the insurance plans at your company and your spouses company to see which one is more beneficial. If switching policies is best, find out when you are able to, so you dont miss that window. Connect with someone from human resources to learn about maternity or paternity leave options. By balancing benefits at each company, you can spend more time at home with your baby. And dont forget to update your insurance plan to include your child as soon as they are born.
Live like you already have a larger family
Test out your financial possibilities. For two-parent households, if one parent plans to stay home for an extended period of time, live like that now to see how well you manage. Put the extra money from your second income into savings and build up an emergency fund. If you will be using a nanny or daycare, ask friends and neighbors what options are available around you, visit those daycares and meet with the nannies so you can compare and contrast the benefits and costs of each. Add items into your budget like baby clothes that need updating every few months, such as diapers, wipes, formula, breastfeeding supplies, and even extra-curricular activities like pregnancy classes or mommy and me programs.
Get your finances in order
Before taking on the expenses of a new baby, review your budget including any debt. By getting organized and learning how to manage your money well, you can pass good habits on to your children. Make sure you and your spouse are on the same page with regard to spending and saving. If you arent, sit down and compromise so you dont have to focus on finances when you are busy with your family. Read books on budgeting. There are many different strategies and finding the one thats right for you is important.
Start thinking about how to save for college
Now is a great time to start thinking about saving for college. There are a variety of college savings options that you can research and discuss with your tax advisor, accountant, financial planner, or investment advisor. Do research ahead of time, so you dont have to focus on expanding your financial education once your child is here. Decide now if you can contribute a small amount each month so it builds over time.
Shop around
The cost of baby items can vary greatly. Do you need high-end clothes when, early on, they only last three to six months? Check if relatives with young children have hand-me-down items such as clothes, toys, or even a rocking chair. Walk around the store to get an idea of the cost of breast pumps, bottles, swaddle blankets, and other necessary items.
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For most new parents, focusing on the big picture isn't easy. You're sleep-deprived, juggling naps and feeding schedules, and excited about the new little person in your life. But milestones are on the horizon, and you'll want to prepare for them while keeping your own finances on track.
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