Friday, September 23, 2011

How to Budget for New Baby: Advice for Parents

Having a baby is one of the most exciting times in a person's life; it is also one of the scariest. Many thoughts race through a new parent's mind, but one of the most troubling thoughts is being financially prepared for a newborn.

Don't worry yourself too much about your financial situation. With proper planning and care, it is easy for many people to budget for a new baby. Yes, babies do change a couple's financial situation, but it is not impossible to spend money on your new baby and have some left over. Consider these tips.

Resist Buying New Baby Items

This is probably one of the hardest things for new parents. Every parent wants the best for their new baby. The old mindset of buying happiness easily takes over and compels parents to spend hundreds of dollars on new items. However, your money won't buy your child happiness. As long as that stroller works, is safe, clean and in good condition, it does not matter if it cost you twenty dollars or two hundred dollars.

Keep that extra money and put it towards something useful, such as a savings account for your child's future college education, which will approximately cost you around $184,000. If you are able to put a few hundred dollars in a savings account with seven percent interest every month, you can work on accumulating the money he or she will need for college.

Keep Your Budget Visible

It is easy to forget or neglect your budget if you cannot physically see how you are doing. There are software programs that make it very easy to record transactions and help you limit your spending. Set your goals and stick to them. Many programs will let you know when you are reaching your spending limit for different categories, such as rent, food, utilities and clothes.

Use Coupons

There are many coupons for baby needs, but you should also use coupons for everyday items. Though the savings may seem minimal, it does add up. Make sure you take all of the money you save with coupons and put it towards that savings account.

Set Your Priorities

Determine what you need the most. You may find that many people will help you get important items, such as a crib, clothes, toys and other baby needs. If you already know what items people are going to help you get, you need to figure out what items you still need and the order of their importance.

Cut Back on Personal Expenses

Part of having a baby is being able to sacrifice things in your own life. You and your partner should pick one thing that you do frequently, such as eat out, purchase new clothing or go to movies, and cut that thing out of your budget. Figure out how much you spend on that expense and put that money towards your savings goal. You may be shocked to find out that you spend hundreds of dollars every month just by eating out during your lunch break.

Hopefully these tips will help you budget for your new baby. Congratulations and good luck!

Anthony Thompson is a content contributor for companies offering an interest only mortgage, and he insists that reasonable mortgages are still available for all types of borrowers.

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