We’re expecting! How do we plan our finances?

Along with all the excitement that comes with a pregnancy announcement is the sometimes unspoken worry about how to afford all that goes along with a tiny bundle of joy such as food, clothing, childcare and activities.

Even future expenses like college tuition and weddings that seem so distant now will be here before you know it. But by taking a practical look at what life will look like postpartum, you and your family can thrive financially.

Plan for life after delivery

Do either you or your partner plan to stop working to stay home with the baby? If so, how would that impact your current financial situation? Alternatively, if both of you will continue to work full-time you should start investigating the cost of child care in your area.

“Many families are shocked at the cost of child care in their community,” explains Beth Blanco, Certified Financial Counselor with Everyday Money, Foresters Financial’s live financial coaching service. “Some couples find that one parent foregoing their career temporarily or cutting back to part time may allow them to stretch their finances further than paying for full-time daycare.”

Also read: How do I build an emergency fund when I keep having emergencies?

Rework your budget

Depending on your career and childcare decisions, you should begin to practice living within that new financial reality now. For instance if you know childcare will cost you $1,500 per month, rework your finances and start setting aside that $1,500 well before the baby arrives.

Not only will this strategy put you into reality mode early, but as a bonus you’ll also have a nice healthy nest egg for unexpected expenses – or maybe even the start of a college fund!

It’s important to create a new balanced budget that is based on your new lifestyle, which may mean cutting out discretionary expenses that have crept into your life such as travel, meals out, lavish clothing or entertainment.

Also read: I’m great with money! Why do I need a financial advisor?

Practice “values based” budgeting, which means spending your income in the areas that hold the most value for you.

Pre-purchase obvious expenses

You can see some expenses coming well in advance such as a crib, a stroller, a layette, or even a replacement vehicle that’s more family friendly. You’ll want to try to arrange all for all these needs well before the baby arrives. You may be able to get some of these items gifted to you, so make sure your register at a baby store early in the pregnancy to stretch your dollars.

Also read: Tips for raising money-smart kids

Items you don’t receive as gifts may be available secondhand if you’re on a tight budget. Check into baby swaps or secondhand stores that specialize in infants and babies. You’ll be surprised how many items are actually brand new!

While it can be thrilling awaiting the arrival of a baby, you can put that time to good use by planning for the financial impact well ahead of time. By doing so, you can truly enjoy your new baby knowing that you are prepared and financially secure going forward.

Also read: 7 questions to ask before buying your first home


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Marcy Musselman

Marcy Musselman is a Financial Coach for Foresters Everyday Money, providing unbiased financial coaching and education with the goal of improving the financial wellbeing of Foresters Members. With over 20 years’ experience in the fields of investments, insurance, student loans and mortgages, Marcy writes about all aspects of personal finance with a focus on how family life changes effect credit, debt and budgeting needs.