FINANCIAL ANALYSIS
Your new baby will be a wonderful addition to your family, but he or she will also be a major financial undertaking. It is important that before your baby is born, you have your finances in order. You will have to budget for your new baby – get all your rubber ducks in a row! Sit down to go over your budget when you have plenty of time to spend on it. Make sure that you are free of distractions so that you can focus on getting the budget done right. Make a list of all your monthly expenses: rent or mortgage, taxes, health insurance, car insurance, car payment, utility bills, phone, cable, internet, cell phone, loan payments, groceries, gasoline for your car, etc. You should try to come up with every expense – no matter how small – so that your figures will be precise. Having a well laid financial plan before you have your baby will make you feel confident that you are prepared for parenthood.
Once you have written down all of your existing expenses, you will now have to list the new expenses that you will incur after the birth of your baby. Find out how much your health insurance is going to go up when you add the baby so that you have an accurate figure to work with. If you are not going to be a stay-at-home parent, then you are going to have daycare costs. Shop around for the daycare that is just right for you. You might decide that you want to select a stay-at-home mom to be your babysitter rather than going to a daycare business establishment. You should compare prices and find a location and situation that you are comfortable with and will be able to afford. Don’t rush your decision on this – it is very important that you have confidence in your childcare providers. You also have to prepare for the nutritional expenses that your baby will bring – formula (if you are not breastfeeding), baby food, vitamins. Check various stores for the best baby food and formula prices – you will be surprised to see that there is a wide variety to choose from. In fact, you can even purchase baby foods on the internet, and there are often some incredible deals online. You are also going to have to spend money on clothing and supplies for your new baby. Babies grow at a rapid pace, and you are going to have to buy new wardrobes for your baby quite frequently. You are also going to want to start a savings for your baby as soon as you possibly can. Even if you only have a few dollars a month to spare at first, it is in your best interests (and your child’s best interests) to start a savings early. Figure out what percentage of your income can go to savings after you have calculated all of your other expenses.
If you determine that you are going to be cutting it very close financially once you have a baby after you complete your financial analysis, then you should try to look for spots that you can cut some corners. Maybe you can find a car insurance company with lower premiums. You might decide that you should downgrade your lifestyle – get basic cable instead of a premium digital cable package, get rid of your extra telephone features like call waiting and three-way calling, trade your expensive luxury vehicle in for a more affordable used family car. Next time you go to the grocery store, try to trim your costs by buying generic brands and eliminating frivolous purchases. The more money you can save, the easier it will be to raise your child. Love is the most important thing that you can provide to your child, but financial security is certainly next in line.
