Budgeting for Baby

Pregnancy Pillows Sale

Trusted Baby Bedding Stores

Baby Bedding Blogs

Baby Bedding Search

		| E-Mail Page To A Friend |

What's a tired mom-to-be to do? Buy a Snoozer Pillow

And speaking of cutting back, it cuts back your big ticket purchases and if you do an in-depth registry, it can even cover your diapers and clothing for most of the first year. That leaves formula or breast feeding supplies, childcare if you're going back to work, perhaps lifestyle cut-backs if you've decided to stay home with baby instead of returning to work, medical costs like co-pays and medications, increased insurance premiums, probably more than a few unplanned expenses. (They come with the territory.) You'll still need to save for your own future. You can't forget that. Baby's future is bright, too. She'll need some savings of her own.

Does your family budget have enough room to accommodate these upcoming changes? Rather than dealing with it all at once when the expenses come rolling in, make budgetary changes now, so that you're used to living on your new budget well in advance of baby's arrival. The earlier you cut back and save, the more funds you'll have in an emergency later. Plus, adjusting to your new financial lifestyle will be easier to deal with when you're not keeping the sleeping schedule of a six week old.

What will baby's immediate future cost? For everything from checkups to cribs to teething cookies (excluding formula or breastfeeding equipment and day care costs) from pregnancy through the first birthday, estimated expenses range from $1,500 for a budget-minded family to in excess of $10,000 for the first year alone. That's for families where prenatal care, delivery and hospital charges and pediatrician's bills were covered by insurance with only minimal co-payments on the part of the patient.

Add to that total $150 to $500 for breastfeeding supplies like breast pumps and storage supplies or $1,000 or more for formula for one year (with a thousand dollars being the least expensive formula choice, costs can greatly increase if your child needs special formulas for medical reasons). Will you need to pay for day care on top of that? Start saving now, to help ease the expenses later.

What will baby's childhood cost you? Thousands of dollars a year. It ranges from a few thousand, to the sky's the limit depending on your lifestyle choices. Can your current budget handle that? If it can't, it's time to make some adjustments.

Budgeting for emergencies
Emergencies happen. And when you've got children, those emergencies make you more vulnerable. After all, you've got more at risk.

What if you or your spouse loses a job? Becomes temporarily incapacitated due to injury or illness? What if your home floods? What if you need to replace your home's roof or septic system? Every family should have an emergency fund.

The bare minimum to set aside is three months of expenses (housing, food, medical, etc.), but ideally six to twelve month's salary.

Budgeting for college
Think about your own education expenses. Did you go to college? Who paid? How do you anticipate your child's education being funded? Do you plan to pay for part or all of it? Plans are wonderful, but dreaming and doing are two different things. Unfortunately, most people will not be able to pay for college without years of careful planning. The earlier that planning begins, the more money will be there for Junior when those tuitions bills roll in.

It's great to start early, like now if you can. How do you start? Do some research. Learn about the financial options offered by your bank. Set up a meeting with a professional financial planner. Your lawyer is a good source when looking for a reputable financial advisor. (Speaking of your lawyer, now's the time to meet with your attorney to set up a will.)

Do you really need to start investing now? How much should you invest? Where should you invest it? You really should start now. The sooner you start, the more your interest will compound over time.

The following investment is not enough to pay for college, but it is an easy way to look at investing. Consider what happens when you invest $100 a month from birth to age eighteen. A tax-deferred investment of $100 a month earning 9% interest will earn $49,561 over eighteen years (adjusted for 3% inflation rate). That $100 a month is a cable television bill for many families. Certainly your child's future is worth more than cable television. Obviously, a college education will exceed $49,561 for your child. But, that $100 investment can be doubled, tripled, etc. resulting in much larger returns.

If you can invest enough to cover college entirely, by all means do. The majority of Americans can not pay tuition in its entirety. But any investment is better than none at all. Your investment can be offset by student loans your son or daughter can pay off themselves, or you can take the loans out yourself. You can worry about that in the very distant future.

For now, figure out just how much you can put away and stick to it.

Stocks? Bonds? CDs? Money Market Accounts? It all depends on how much of a risk you're comfortable with. If you're conservative and wish to stick to "safe" investments like Certificates of Deposit, expect smaller returns. If you're more of a risk-taker, consider the stock market. You have potentially higher returns, but you also risk losing your investment. Often, financial planners advise mixing your investment portfolio to include both high and low risk investments.