Couples, especially newlywed ones, would usually enjoy a bit of financial windfall for the first few months or years of their marriage. This is mainly due to the fact that two people are now sharing the expenses on food, utilities, and other expenditures. There are also more opportunities for couples to save money since they have lesser expenditures to pay for.
This happy situation can easily turn sour though when couples are expecting their first child. With this new bundle of joy come various additional expenses that parents will sometimes find it hard to cope with their financial needs and even adjust their lifestyle.
Couples, though, don’t need to find themselves broke simply because they are expecting or already have their newborn baby. Below are some useful financial planning tips couples about to start a family can follow:
Start living a simpler lifestyle. It is not unusual for newlywed or childless couples to have date nights once or twice a week wherein they have dinner at a fancy restaurant and give each other lavish gifts. They will also go on vacations abroad once or twice a year because they want to get some rest and relaxation and because they “deserve it”. Unfortunately, all of these will have to change or even stop once a couple is expecting a baby. All the money you will save from these activities or events can go to something more important like payment for the hospital bills, medicines and vitamins, diapers, and other expenses that come before and after the baby’s birth. The last thing you want to happen is to be covered in debt just because you are expecting a baby. You can avoid this problem by living a simpler lifestyle once you know that you are expecting.
Anticipate your expenses. Make a list of all your anticipated expenses. These include hospital bills, doctor fees, maternity clothes, birthing classes, and necessities for the baby (a crib, stroller, feeding bottles, blankets, etc.). Then, calculate the total. You now have to rework the budget you and your partner are currently on to include this cost. Expect that there will be expenses that have to be added in the future but don’t fret; you will be able to figure them out as you go.
Increase your emergency fund. If you already have a safety financial net, you and your partner or spouse should now work on increasing it. Financial advisors recommend having six-to-nine months of living expenses set aside in case of job loss, which can become more of a problem if one spouse is at home on childcare duty. Look at your budget again and figure out how much you can afford to put into an emergency fund after all the basic necessities are covered.