Financial Things to Think About with A Baby on the Way

There are many things that go through an expectant mother and father’s heads when thinking about how their lives will change with their first baby. There are baby items to buy; daycare options to think about, decorating a nursery, saving for college, creating a will and more. Some parents move to a larger home, while others focus on building emergency savings. All of these financial considerations should not be overlooked before the baby is born.

Financial Things to Think About with A Baby on the Way

Pay Off Debt

One of the best things an expectant couple can do is pay off as much debt as possible before the baby is born. It’s easy for parents to add to their debt during this time because they are purchasing things for the baby, so focusing on debt payoff is essential. Even if you have the best credit cards on the market, interest rates are always abound and most parents find it much more difficult to pay off debt after they have a baby, so remove the financial stress from your lives while you still can.

Consider A New Living Arrangement

Living in a one-bedroom may work out fine for a busy couple who doesn’t spend a lot of time at home, but new parents often want more space for themselves as well as their baby. Babies take up only a small amount of space before they learn to walk, so parents may find that waiting to move until the baby is around a year old gives them time to save up the money they need to move into a bigger space.

Explore Childcare Options

It’s best for expectant parents to think about childcare arrangements as soon as possible because some of the best places have long waiting lists to get in. Having one parent stay at home after the first year is an option for some families. Parents should think carefully about childcare arrangements and explore several options before the baby is born.

Purchase Baby Supplies

Most parents want to buy everything they think their baby may need before they are born, but many new baby items end up being a waste of money. Stocking up on diapers and other essentials when they are on sale during the year before the birth is a smart move, but parents should avoid buying every cute outfit they see. Used clothing from Goodwill or friends and family works just as well as new clothing as is much less expensive.

Life Insurance

Canadian parents are fortunate because they don’t have to worry about medical costs during pregnancy the way American parents do, but they should consider purchasing life insurance before the baby is born. Everyone should have a term life insurance policy to provide for their final expenses, but it is especially important for new parents to have enough life insurance coverage to provide for their baby until adulthood if something should happen to them.

Consider a Second Job

Building up an emergency fund is a big consideration for expectant parents. Getting a second job during the pregnancy is one way to prepare for the baby’s birth. Some parents even start building a side business during pregnancy so that they have additional income that continues long after the baby is born. Even getting a part-time job for six months or so helps new parents save up a couple thousand dollars for emergencies after the baby is born.

Having a child is a big responsibility, both financially and emotionally. Making a plan and sticking to it helps new parents financially prepare for the birth of their child. Making preparations ahead of the baby’s birth helps parents eliminate stress from their lives, which is likely to improve their bond with their baby.