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Eight Ways to Budget for a New Addition

July 17, 2009

in Personal Finance

Pregnancy is exciting. It’s a time filled with baby showers, ultrasounds and nursery redecorating. It’s a time of joyful anticipation. And it’s a time to think about your household budget.

But moms- and dads-to-be often forget about that last item. With everything that’s currently going on and upcoming, money matters can easily be the last thing on their minds. However, a new addition to the family will have a significant impact on the budget, and it’s very important to consider this ahead of time. Here are eight things you can do to prepare for the baby and keep your finances in order.

1. Start saving extra money as soon as you learn about the pregnancy. Those first few months won’t be as expensive as mid to late pregnancy, so you should be able to put a fair amount of money away. This fund will be helpful when it comes time to buy things like maternity clothes, baby furniture or a stroller.

2. Seek out deals on basic needs such as diapers, wipes and baby wash. Clip coupons from your Sunday paper or find them online, and then check your favorite stores periodically for sales. You’ll be glad that you stocked up on these things later on.

3. If you know the baby’s gender, put the word out to friends and relatives. They may have some baby clothes that you can use. Even if the gender is uncertain or you want it to be a surprise, you can probably get some donations of neutral clothing to help you get through those first few weeks.

4. Start checking out prices on things your baby will need on a regular basis. It may be difficult to determine how much formula she will drink or how many diapers she will go through in a month’s time, but at least you’ll have a general idea of what to expect. You may want to give it your best guess and work on a tentative budget to give yourself a head start.

5. Understand that a new addition to the family will raise many of your expenses. You’ll buy more groceries. You’ll use more electricity warming up bottles and turning lights on in the middle of the night. You’ll use more water giving baths and washing tiny clothes and bedding. Take this into account when planning your post-birth budget.

6. Resist the urge to take the easy way out when it comes to meals. When you’re tending to a newborn, it’s easy to fall into the habit of eating takeout and convenience foods. But cooking is less expensive and far healthier for you and your family. Ask other family members to help with food preparation so that it won’t be such a chore.

7. Set some money aside for medical expenses. Babies need several check-ups during their first year of life, and they’ll also need medical attention in the event of illness. Health insurance helps a great deal, but you’ll probably still have some out-of-pocket expenses such as copays and over-the-counter medications.

8. Weigh your childcare options. If a parent plans to stay home with the baby, it will significantly affect the budget. If you take him to daycare or a sitter, it will also have an impact. It’s important to carefully think things through before you make a decision and adjust your budget accordingly.

When there’s a little one on the way, it’s important to think about the financial implications. Planning ahead will make things easier when your bundle of joy arrives, allowing you to enjoy those first months and years without worrying about money.

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Frugal Living Does Not Equal Depriving Yourself

June 21, 2009

in Personal Finance

In today’s materialistic society, it seems like everyone tries to outdo everyone else. If Joe buys a 42-inch TV, John goes out and buys a 60-inch model. And the irony of it all is that neither one of them even watches much television!

Because of this way of thinking, those who try to live frugally have often been viewed as stingy. People often think that frugal shoppers are depriving themselves and their families of the finer things in life. What they don’t realize is that frugality is not about never buying anything except for the essentials. It’s about getting more out of your money so you can have the things you need and some things you want on a smaller budget.

Those who do not subscribe to the frugal school of thought often work long hours and acquire truckloads of debt to support their spending habits. They may have designer clothing, shiny new cars and all the latest electronics, but are they truly happy? Frequently, they’re not. If they’re working lots of overtime, they don’t have the time to truly enjoy those things (much less priceless time with the ones they love). If they’re running up lots of debt, they probably spend a lot of time dodging bill collectors and worrying about how they will ever pay it back.

Living frugally affords a more laid back approach to life. When you’re not concerned about having the newest thing from the hottest designer straight off the shelves, you can dress fashionably at a minimal investment. Instead of paying a premium for that designer label, you can find a nearly identical item at a discount store or thrift shop for next to nothing. You don’t buy the latest gadgets just so you can be the first one on your block to have them, but you purchase electronics that you know you will use while they’re on sale.

Frugal shoppers also strive to save money on essentials so there’s more left over for savings and wants. They scour the sale papers to find good deals at the grocery stores, and clip coupons to save even more. They turn off the lights when leaving a room and hang clothes out to dry to lower their electric bills. And they run all of their errands in one day to conserve gas. These measures alone can add up to significant savings each month.

Frugality doesn’t mean keeping your expenses to a bare minimum. It means stretching your dollar as far as it will go. While frugal shoppers may not have the newest and most expensive things, they can buy much more with a given amount of money than the average consumer. For the price one might pay for the latest cell phone, they can buy groceries, buy the kids’ school clothes, pay a couple of bills and have enough left over to treat the family to a movie.

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