5 ways to Organize Your Family’s Finances Before Baby Arrives

Everything changes with a new baby, and one area of concern for most parents is finances. A new baby comes with extra costs, and it’s advisable to start putting your finances in order early on. Working out your finances ahead of time gives you peace of mind and more time to focus on your new baby.

So, how do you get your finances ready? Here are the five ways to organize your family’s finances before your baby arrives.

Pay Down Your Debt

Pay down as much debt as you can, and if you’re in a position to clear it before the baby arrives, the better. It’s no secret that your baby will come with extra expenses from hospital bills, diapers, formula, and childcare. The secret is ensuring you pay the minimum balance on time for good credit.

First, figure out your baby’s and family’s budget for the month, and start paying off as much debt as you can with what is left. For example, if 5% of your monthly income goes towards paying off the debt, you can increase it to 10 percent depending on what you can manage as you find other ways to cut down your expenses.

Set Up an Emergency Fund

Despite how financially savvy you’re, you can’t predict the unexpected expenses that creep up when you have a baby. For instance, a trip to the pediatrician in the middle of the night, formula when you don’t produce enough, or the expenses that come with replacing a nanny.

Building an emergency fund provides you with a financial safety net. It will keep you from borrowing money and increasing your debt because of unexpected expenses. Aim to save up a fund that can cover your living expenses for six to nine months.

Create a Budget

With all the physical and emotional stress that comes with having a baby, you won’t have the time and energy to worry about money and be counting every shilling all the time. Creating a budget ensures you’re financially prepared when your baby arrives.

While you might be tempted to go on a shopping spree buying all that you think will make your life easier, your baby doesn’t require so much. A budget will help you estimate the necessary baby needs like formula and diapers and set aside funds without going over what you can afford.

A budget gives you a clear picture of how you use your income, making it easy to cut unnecessary costs and allocate those funds to other important areas like healthcare, rent, and food.

Take Out a Health Insurance

When you think about it, pregnancy can be quite expensive. From the supplements, antenatal visits to pediatric healthcare, it makes sense to take out health insurance. The best part about this is that you don’t have to wait for your employer to offer it, there are many insurance options you can explore.

If you’re in Kenya, you can take advantage of the free Linda Mama initiative or start paying your NHIF remittances to cover antenatal care. Alternatively, shop around for an insurance provider that meets your needs and budget. Most insurance companies offer a maternity package that’s inclusive of antenatal visits, delivery, and post-natal care.

Plan for Child Care

Child care is one expense that you can never leave out when organizing your family expenses. As a new mother, you need as much help as you can in taking care of the baby and running the household. So, you may need to hire a nanny to help out.

You also need someone to stay with your child when you resume work after maternity leave. Planning and budgeting ahead for child care help you focus on your baby and worry less about affording the extra help.

In Closing

As a parent, you must ensure that your finances are in order before your baby arrives. These five tips discussed above guide you on how to organize your finances, giving you time to focus on your baby.

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