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Baby's First Year: Reduce the Financial Strain

Posted on August 26th, 2014 by | 10 views

It can be very easy to get overwhelmed with a new baby coming.  Everyone is excited to offer advice on what you “need” to have.  You will quickly realize that baby supplies (while small and cute) aren’t cheap.  Here are some tips to keep the first year costs from ruining your budget.

(1)  Register for gifts before the baby.

People want to get you something you actually need.  Left to their own devices, they will likely get you clothes and stuffed animals.  That is fine, but many people find themselves with an abundance of these things – some of which are hardly used.  Plus, I found registering to be a great way to stay organized with what you want and what you already received.

(2)  That being said – be practical with the registry.

A friend's Mom once said to me, "all the baby needs is milk, a place to sleep and to have clean diapers."  That helped me focus on the essentials.  While swings, diaper bags and baby bathtubs are all helpful, make sure you have the essentials covered first.  

(3)  Find your local thrift store.

We have a baby thrift store down the street from us that is incredible.  It has baby clothes, toys and even maternity clothes.  When our daughter was first born, she was too small for the 0-3 month clothes.  So my husband went to the thrift store and bought a handful of newborn outfits for a total of $10.  She only wore the clothes for a couple weeks, so why pay 4 times as much elsewhere?  You can of course also check out Craigslist or swap with a friends, but the thrift store may give you more options in a pinch.

(4)  Add a line item in your budget for miscellaneous kid items. 

If you register and have a baby shower, you should have everything for at least the first few months.  But after that you will be amazed by everything you need to keep buying.  For example, maybe the baby wrap you wanted is uncomfortable and you want to try a new one.  By having a budget (as with everything) you are more likely to prevent unconscious spending.  If you don’t use up your budget amount one month, save the difference.  You will need it for bigger items like the upgraded carseat at 1 year.

(5)  Start talking about college.

Yes, it is 18 years down the road, but most people need to get a college degree if not more these days.  You and your spouse need to be in agreement about what your intentions are.  Do you want to pay for your child’s undergraduate education?  What about graduate school?  Start saving now if you plan to help with at least some of the bill even if you start at $10 per month.

(6)  Set up a savings account and notify family members.

Whether it is a 529 or other savings plan, let your friends and relatives know you set something up for your child.  A contribution to the account is a great idea for holidays or a child’s first birthday.  When children are young, they can’t really appreciate tangible gifts anyway.

(7)  Consider meeting with a fee-only financial planner.

Find an objective, third-party professional that can help you get on track and stay focused.  It will be so helpful to have your family goals and financial plan in writing so you can stay focused during this incredible but busy year.

Linda Rogers is the owner of Planning Within Reach, LLC.  PWR provides comprehensive financial planning to young families in San Diego.  Linda lives in San Diego with her husband and two daughters.