Top 6 tips: Financial planning for new families
Whether you are about to be first-time parents or you family is expanding – money is an important consideration to make sure you can focus on what is important. Read our top 6 tips for saving money and better money management for expectant families.
Itemise, organise and plan to save
When buying a new house or starting a renovation project, one of the first things you will likely do is research. A new baby or enlarging family is a good reason to take an analytical approach as well – that’s where good financial planning for new families comes in. The world is full of apps that can help you budget for your new addition. However, sticky notes and Excel sheets can do the same job, if that is more up your alley.
If you already have children, you probably have a very good idea of what you will need for the new baby and maybe already have some of these items on hand. However, if this is new territory, don’t forget to reach out to your friends and family who can give you tips and tricks that you haven’t thought about. Also, some online research can give you some range of what products cost and where you can find good sales.
One method to narrow down the list is to create an “essentials” list and stick to that at first, with some money set aside for anything unexpected. Another method is to have more than one list: baby essentials, growing toddler, wishes/extras. This will help you prioritise your needs (and consider when you will need them).
Start by planning for the child’s first year
When starting or adding to your family, it is easy to get overwhelmed by thinking of the distant future such as school expenses or even saving for college or university. A good place to start is thinking in manageable time-frames. Plan ahead for the first year and consider the supplies that will be needed for the new addition.
Stick to basics at first: car seats, prams, cots and changing tables. Many of these items are convertible as your child grows, such as adjustable prams and cots which can take you further than the first year. After the larger items are accounted for, then start making lists about the smaller items that will be needed such as blankets, clothing and nappies. This is a good time to use an Excel sheet.
Some hidden costs might come from baby toiletries, especially for new parents. Stock up on the essentials like baby shampoo, lotions, baby power and don’t forget nail care – a baby’s nails can be surprisingly sharp!
Avoid name brands to save money
It sounds nice to have your baby adorned with the cutest and highest end brand names. In practice, your new baby will be only wearing the clothing in the comfort of your home and spills are likely. If you have your heart set on some items, choose special clothing and accessories only for occasions or photo sessions.
Baby toiletries also come with a lot of choice and also a lot of price variation. Like brand name clothing, this is a good time to choose off-brand products or cheaper options. Consider your priorities and choose your battles. For example, if exclusive or organic products are important to you, sale shopping ahead can save you significant amounts of money. Just check the expiration dates to make sure your investment isn’t accidentally wasted.
Make the most out of baby registries
Celebrating a new addition to the family often includes a baby shower or other celebrations. Different families have different wishes when welcoming in a new member of their family, some new parents want to focus on special moments and receive sentimental keepsakes, while others would like to take this opportunity to ask for useful care items or clothing to save money.
Like wedding registries, baby shower registries are picking up speed in many countries. Retailers have responded to this by offering specific baby registries, such as IKEA and Amazon. If you want to be a bit more subtle, reach out to family and friends and mention that it would be nice if they consult you with gift ideas before making purchases. That way you don’t end up with 10 sets of bodysuits and no baby blankets.
Buy and sell second-hand children’s clothing
Because babies and children grow fast, some parents find themselves with a closet full of items that have only been used once or twice, if at all. Reach out to your family and friends with young children and ask if they have items that they do not need that would be suitable for your child’s first year.
You can also sell on items that you don’t need to other parents. Facebook and other social media groups have a dedicated following of families with children. There’s a good chance that you can find local groups dedicated to selling on lightly-used clothing and other baby essentials. It’s a win-win for a growing family, because you can buy from those groups but also sell to them
Consider the future needs of your family
The costs of babies and toddlers do add up, however families can save a lot of money by planning and buying strategically. In the longer run, it is also important to remember the future also for the family as a whole. Saving for a rainy day is wise for families. For example, you can create a savings account where you add money over time. Consider setting aside the same amount each month, that way you can really grow the account quickly.
Also, it is not a bad idea to start again with a budgeting list for the toddler years and also for the school-age years. A good tip is to consider long-term costs but focus plans on timeframes that are within reach – at least as a starting point. For example, many people hope their children will become a doctor, but it is hard to truly plan ahead for that time when your future doctor is just a baby. If you start saving smart, then there are many more options available for your child in the future.
Family related offshoot expenses can be a bit bigger and sometimes trickier. Is your car large enough for your growing family? What about your home, do you need to carry out some renovations to make it functional as your child or children get older? Parents should also take some time to plan and consider how to finance these larger investments down the line.