The pending birth of a child is worth celebrating, but you don't want to spend a lot of money celebrating. As parents-to-be find out soon enough a new baby means expenses — lots of it. You need to have your finances in order and make budgeting your skill.
(We asked several couples to share how much they spent for their child's first year. The article got many parents talking. You may read it here. There was even a mom who shared her budget to disagree with the article, which you can find here.)
How to financially prepare yourself for the arrival of your baby
Having a financial plan isn't just for the wealthy. It will help you ensure that you can provide for your family’s needs and necessities such as education and health. It can also avoid conflicts between you and your spouse — money is a stressful topic for couples especially when it is not discussed.
During SmartParenting.com.ph "Baby Shower" on April 13, 2019 at the Linden Suites, Josefina Marquez from Insular Life gave tips to moms-to-be about how to set financial priorities and avoid unnecessary expenses. Whether you’re a first-time mom or waiting for the newest addition to your family, her suggestions can be useful to you.
Set your priorities
If you are currently expecting, your priorities will include the costs of your delivery and the money you will use for the first few months after giving birth. Don't forget you will stay home during that period. Marquez counsels, “You have to set aside three to six months’ worth of living expenses in your savings account. It will be your future fund for unexpected expenses.”
Spend your money wisely
While spending time in the mall or in a baby store, or even while just browsing through online shops, you might come across lots of adorable items like clothes, accessories, and toys. But when you feel the urge to buy those items, ask yourself first: Is this item really necessary? If it is not, it might be best to put off the purchase for now.
“Don’t waste your money [on] unnecessary expenditures,” Marquez said. She elaborated that instead of purchasing pricey items that your baby might grow out of in record time, why not try going for hand-me-downs? “Don’t be shy [about] borrowing…because it’s practical, and people will be really glad to share some clothes with you.”
Aside from shopping, be wise with your spending when you eat out. It can “take a big chunk [of] your expenditures, so as much as possible, eat at home, cook your meals and find whatever is healthy.”
If you have any outstanding debts, Marquez advised that it is important to pay them on time, since not doing so can only cause you more stress in the future.
Look for creative money-making opportunities
Let’s be real: it can be very challenging to support a family financially when there’s only one person working. But as we've written before, stay-at-home parents now have plenty of ways to earn income with online jobs. Do you have a lot of junk at home? Your gently used items may be treasures for people in need and can be the start of your career as an online seller. Are you a whiz at budgeting? Marquez says it's a useful skill for a part-time financial adviser.
Invest for the future
Once you become parents, the uncertainty of the future makes you anxious. You want to make sure your child's safety and welfare are protected even when you're not there. That's when insurance can become handy, not for your baby but for yourself.
In a previous Smart Parenting article, Melvin Esteban, wealth management executive with Insular Life Assurance Co. Ltd, says “Children have no insurable interest because they have no financial dependents. In the event something untoward happens, it will be emotionally devastating, but there is no financial loss to the family,” he explained.
“You need to protect yourself, get yourself and your partner insured even before your baby is born,” said Marquez. The types of insurance you can avail of include those which protect the family as well as those that protect your possessions such as your home and your car.
Insurance can also help prepare for your child’s future, specifically for his college education, which is definitely expensive. Even if there is still a long time before your child has to go to school, Marquez told the attendees, “No parent can say they save too early for their children’s college education.”
This story originally appeared on Smartparenting.com.ph.
* Minor edits have been made by the Entrepreneur.com.ph editors.