If you are expecting a new member of the family, it affects a lot of areas in your life including your household budget. Expecting a baby is a very exciting stage in your life but you need to prepare for it thoroughly. All aspects of your life will be affected when a new child is added into the family and your household budget must be prepared to meet these changes.
Staristicbrain.com shares that the average birthrate in the country is at about 4 million every year. This means that a lot of families deal with ever changing household budget every year. As much as they are excited with the new member of the family, they need to continuously adjust their finance and budget for the whole family.
At this point, you already know that marriage and personal finance go in hand in hand. And as you go further in your relationship and plan a family around it, you need to expect that your household budget will have to adjust together with those changes. And if you are planning to add a new member to the family, the budget will also change.
Having a new child in the family is really exciting but with it comes a lot of changes. For one, parents will have to make do with as little sleep as their newborn will allow because milk and diaper duties take precedence over sleep. This can completely rearrange your whole schedule because your top priority is the small one.
Household budget affected with a new child
As exciting as a new baby is inside the house, you need to be aware of the changes that you need to adjust for especially with your finances. Just like how you will try to sneak in a power nap here and there because you already know that you will not be sleeping straight for the coming months, knowing what financial changes will be coming can help you prepare your household budget worksheet better.
- Making sure mom gets her nutrients. When you or your wife gets pregnant, you immediately focus on the needs of the baby and there is nothing wrong with that. But in the process of understanding how you can help you baby grow inside healthy and strong, you also need to put importance on the need of the mother. Making sure she has all the nutrients and vitamins and the exercise that she needs to keep the baby healthy inside is important and will have an effect on your household budget. The milk, vitamins and other nutrients to make her bones stronger to be able to carry a baby inside for nine months is important. She would also need some new clothes to make pregnancy as comfortable as possible.
- Preparing for hospital bills. This is something that you need to prepare for regardless if your health insurance will cover the cost. You will never know what complications may happen like a planned normal delivery might lead to a cesarean operation. Plan for the worst so you have a back-up amount in case your insurance does not cover the whole operation. You would have to tweak your household budget for months to prepare for childbirth. If you do not use the amount you prepared, you can then use them to beef up your emergency fund.
- Living expenses will go up. USDA.gov shares that the estimate cost of raising a kid to adult is about $245,000 on the household budget. The estimates would require you to have about $1 million when you are trying to raise four children and that is just for them. But as parents, you do not need to fret because all these will come in to your household budget slowly, You do not need to have that amount before they are born. You will is slowly especially with your living expenses.The utilities will go up or might even have to move to a bigger house Your food consumption will also go up as well as entertainment and even clothing allowance will increase as well.
- College fund for the child. Another cost that will add up to your household budget is the college fund. You need to make sure that your kids are able to attend higher education or at least college without drowning themselves in student loans. Collegedata.com shares that the average cost of tuition fees alone in the 2013-2014 school year was already at $30,000. This does not include other expenses like transportation, food and even board and lodging. You need to set aside a college fund for your kids so they can have a running start in life after graduating and not have their feet shackled with debt.
- Retirement date can be pushed back. As you add more children into the family, not only will your household budget be affected, your retirement date might have to be pushed back further especially if you have kids at an old age. This is for the simple reason that you need to provide for your child until they are able to stand up on their own two feet. That means they will depend on you and live under your roof for years to come. It will be hard to do those things when you are already retired and depending on pension.
Helping your budget prepare for a new child
When you already know what to expect financially with the arrival of another child, you might want to look into these tips to help you prepare your household budget better.
- Save up ahead. Now that you know that your household budget will be affected, you need to save up ahead of time. Doing so a few weeks before childbirth will not cut it and could leave you running around trying to fill up holes in your budget. As soon as you know that your family is expecting another baby, increase your savings to cover any unexpected expenses along the way.
- Increase your emergency fund. You also need to increase your emergency fund to cover the increase in your household budget’s expense side. The sooner you are able to increase your emergency money, the better your finances will be.
- Pay your bills in advance. This is just in anticipation of big expenses along the way. If you can, try and pay your bills in advance. In the chaos of having of new baby, you might overlook paying some bills which can wreck havoc on your budget and even your credit score.
- Childproof your home. Prevention is better than cure that is why you might want to make sure that your house is as accident-free as possible. Make sure the table and drawer corners are covered with something soft or cover those electrical outlets. You can also make sure that all the cleaning chemicals are either high up on a shelf or locked-away in a cabinet.
Your household budget will be affected just as your sleeping and eating patterns and pretty much everything around you. But you should take a proactive stance and make sure that even if you are losing sleep, your finances are in tact and can continue to support the needs of the whole family including the newborn.