You’ve heard the statistics: it’s going to take a zillion dollars to clothe, feed and take care of your child until adulthood. And that doesn’t include college — or the money you’ll spend if they stick around after 18! But you’re plunging into parenthood anyway.
Good for you! You don’t have to go completely into hock to raise your child well.
New parents often spend an enormous amount of money on their first child and then wonder how they can possibly afford to have any more. This article is designed to help new and expectant parents save money and start off their new job (the most important one!) on the right foot financially.
Remember, as a parent you’ll be targeted by lots of companies who want you to spend money on their “must-have” products. Before you whip out the credit cards or mortgage the home, however, keep in mind these principles:
Principle #1: You’ll never use half the things you thought you would.
Buy an expensive changing table and you’ll find yourself using it as a bookshelf while you change the baby on the floor. That gorgeous outfit you just couldn’t resist? She’ll outgrow it (or throw up on it) before she’s worn it twice.
Obviously, there will be things you need: a car seat, stroller and crib are usually must-haves. But really think twice about buying a lot of expensive toys, furnishings and clothes. Babies don’t care how much stuff costs, and you shouldn’t be tempted to spend more than you can afford just so he or she can have the “best.”
Principle #2: The less it costs, the more your baby will like it.
Forget fancy toys. You’ll discover that baby will get bored quickly with the pricey stuff and want things that don’t cost much at all. Appliance boxes are a great example of a toy that doesn’t cost anything but will get hours of use. Just make sure you give your baby safe things to play with (no plastic bags, small parts or sharp edges!) and you’ll learn you don’t have to spend a fortune for fun.
Principle #3: The best-laid plans always seem to change.
“I’ll be back at work six weeks after the baby’s born,” you say. Or you’re sure you want to quit your job and stay home full time for the first year. Then you discover that you don’t want to go back to your old job, or aren’t cut out to be a stay-at-home parent.
The key to successful transitioning in the first year is to be in a position to make decisions that seem best for you and your child. That means exploring your options before the baby comes along (you won’t have a free second afterward!) and to be prepared financially to choose — and not feel forced into what you really don’t want to do.
Not sure if you’ll want to stay home after the baby is born? Find out about good day care options in your area and learn how much they’ll cost. Subtract day care, diapers, food and expenses from your paycheck to find out whether working outside the home will be worth it. Talk with other parents in your area to find out what they have done.
Want to stay home? Consider starting a small business before the baby is born. But don’t get caught up in the fantasy of working away for hours and hours while baby sleeps — there may not be a lot of time for that. Plan for a small business and let it grow if you can.
Practice living on one paycheck while you’re pregnant. If you can’t do it now, you won’t be able to do it later with all the added expenses of parenthood! Save one paycheck for an emergency fund and use some of it to pay off debts if you have them.
Budgeting for Baby
To help you anticipate some of the costs of new parenthood, we’ve given you a list of expenses you may want to consider.
The first chart, below, will help you decide if you can afford to stop working (or go back to work after the baby is born). Start with your monthly income after taxes and other deductions. Subtract your expenses to find out how much you really earn after you pay for work-related expenses and childcare. It might not be as much as you think! Then figure how that may change if you stop working.
More Money-Saving Tips:
- Buy used, carefully. Shop garage sales and accept hand-me downs – both are a great source of little-used baby clothing and toys.
One important note however, never buy a car seat at a garage sale and always check out strollers, toys and equipment with the Consumer Product Safety Commission (1-800-638-CPSC or cpsc.gov) before you use them to make sure there have been no recalls. While you’re calling, sign up for their mailing list for recalled items. It literally could save your child’s life.
- Keep sleeptime simple. Don’t blow a lot on expensive blankets and bedding for your little one. The Consumer Product Safety Commission now recommends that all babies under one year of age be put to bed with no blankets, sheets, pillows or other soft bedding, to prevent suffocation. Instead, it recommends you simply put the baby in a sleeper or pajamas on a firm mattress with a fitted sheet. (Use a safe crib, of course.)
- Get the best value for your dollars. Before shopping for strollers, car seats, high chairs or other must-haves, check out ratings by Consumer Reports (consumerreports.org). Another helpful resource is Baby Bargains by Alan and Denise Fields, which discusses specific brands (but is not based on product testing like Consumer Reports). Know what features you really want and need so you won’t end up paying for more than you expected.
- Protect your family. Some expenditures are well worth the added expense: good term life insurance for caregivers and wage earners is one. (Remember, even if a stay-at-home parent dies, the household and child will still need to be taken care of). Disability insurance is also a must. Just make sure you get it before you leave your full-time job, not after.
- Breastfeed, if possible. You’ll save an estimated $1,400 the first year in formula. If Mom is returning to work, consider renting a good quality electric breast pump. The $80 or so it will cost to rent it each month will easily be returned in savings on formula (and maybe fewer medical bills, too).
- Seek out formula discounts. If you must bottle-feed or supplement with formula, get as many free samples and discounts as you can. Ask your pediatrician or local hospital for samples. If you must switch formula types or try a new formula, call the manufacturer and ask for free samples and coupons. (They give them out routinely to women in the hospital when they deliver, so they are likely to offer it if you are starting your baby on the formula later). Also visit the manufacturers’ Web sites to request coupons. Finally, save the UPC codes from the labels on the cans. Manufacturers often offer clubs where you can trade in the UPC codes for free children’s merchandise.
- Make your own baby food. Mash simple fruits and vegetables, or use a food grinder, blender or food processor. You can add formula, expressed milk or liquid from cooked vegetables to make a softer texture. Many foods prepared this way can be frozen in ice cube trays for individual servings to be used later. But remember to feed your baby solid food only as instructed by your health care provider.
- Keep clothes lasting longer. Garage sales and resale shops are a great source for clothes that babies grow out of so quickly. Don’t toss clothes (or pass up good ones) just because they have formula stains or other tough spots.
Here’s a recipe from the Cheapskate Monthly (cheapskatemonthly.com) for removing even the worst baby stains: Mix 1/4 cup Clorox II and 1/4 cup Cascade powder dishwasher detergent in a gallon of the hottest tap water you have. Let the clothes soak overnight then wash the next day. It really works!
- Think Big. Your child will grow faster than you think. Buy clothes a little larger than your child currently wears so he or she can grow into them. Buy used toys and holiday gifts when you see good buys — even if your child isn’t quite ready. Then you’ll have them handy for when you do need them.
- Swap with other parents. Hold a parents’ swap meet where you exchange clothes and toys in good shape. For each item you donate, you get to take one item. Leftovers can be donated to a charity.
- Trade babysitting. Start a babysitting co-op with friends or neighbors so you can take turns babysitting. (You’ll probably feel more comfortable having another parent watch your infant, anyway.) For more information on setting up a babysitting co-op, click here.
- Drop Diapering Costs. Some parents swear by cloth diapers, which can save a bundle over disposables. If you decide to go the cloth route, you may choose to use disposables at night or when you travel.
- If you decide to use disposables exclusively, try different brands to find one that will fit your needs without costing a fortune. Some stores carry “private label” brands which are made by the same companies as the more expensive ones. You can also call the manufacturers or visit their Web sites to request coupons. Most importantly: when your favorites are on sale for a great price, stock up!
- You may also want to try making your own wipes. Here’s a recipe from the Tightwad Gazette. Mix together: 21/4 cups of water, 2 tbsp. baby bath or shampoo, and 1 tbsp. baby oil. Cut a roll of thick paper towels in half and remove the cardboard center. Put the towels in a plastic container with a tight-fitting lid and pour the liquid over top of the towels. To use, just pull wipes from the center.
- Keep baby healthy. Make sure your baby receives all proper immunizations. Your local health department may offer them at low cost or for free if you do not have health insurance coverage.
- Keep track. When you do buy items for your baby, save your receipts. You may find that clothes don’t fit, or your child can’t stand the baby sling you bought. In that case, you’ll want to return them or exchange them for something you can use.
Above all, have fun! Everyone will tell you they grow up way too fast. Enjoy yourself and give your baby what it needs more than anything else: your love.