How To Financially Prepare For A Baby
Contributions done by Justin Martz & JW Rayhons
Having a Baby is an amazing event and a beautiful experience and time in your life! However, having a baby is also a major expense. As a matter of fact, according to a 2017 report from the U.S. Department of Agriculture (USDA) in Washington, DC, middle-class American parents spend an average of $233,610 to raise a child from birth to age 17. But according to Nerdwallet.com “ A “no-frills” upbringing — with less expensive clothing and groceries, for example — generally costs more than approximately $260,000…” and A NerdWallet study also found that in the first year alone, “the cost of raising a baby can run upward of roughly $21,000.” This fact alone should create a sense of urgency to prepare financially to have a baby. Below are some tips to help you as you begin to financially prepare to have a baby.
Create a budget:
This is a great first step for any situation. Since its important to have some baseline ideas of your finances when expecting a baby this will especially help you to have financial confidence as the big day approaches.
An easy 4 step baby budget (Budgeting for New Parents: How to Budget for Baby - NerdWallet) includes determining your priorities, Practice living on less, Anticipate changing expenses, and preparing for when there just isn’t enough. There are many unexpected things when you have a baby. These steps will help you to be ready for what comes your way.
Save on Baby stuff:
This may be an obvious statement, but babies need a lot of stuff! This ranges from diapers, clothing, cribs, bottles, toys, etc. The expense for all of these things add up fast so thinking through your plan to acquire what you need is important.
Some goo tips include shop online and use places like Facebook marketplace, price around for diapers, ask your pediatrician for samples, and buy at the end of the month. The article linked here will walk you through these and many more (14 Surprising Ways to Save on Baby Stuff | Parents).
Prepare for the future:
Not only is raising your child a hefty cost but if you do want to help with college expenses the 2020 annual cost is over 25k. Starting an account like a 529 plan as soon as possible is a great way to be proactive about your child’s future education. This is a great article that explains the benefits of a 529 plan (What Is a 529 Plan? | DaveRamsey.com).
There are many ways to help prepare and save for the birth of your child and thats why we're here. At Rayhon’s Financial Solutions we help you create goals that'll lead you to be ready now and in the future. Connect with us for an initial conversation, call us at (480) 507-2425 or contact us online. We’d love to meet you.
Justin Martz is a Non-Registered Associated Person with Voya Financial Advisors. Troy cannot offer securities or advisory services.
The content in this article was prepared by the article’s author. Voya Financial Advisors, Inc. does not endorse its content, and the views expressed may not necessarily reflect those held by Voya Financial Advisors, Inc.