When you’re not a parent, budgeting can be much more comfortable. There is only one set of finances to track and one set of expenses. When you tie the knot, you and your spouse become faced with the task of learning how to coexist and deal with the costs associated with being a parent!
Many new parents underestimate how much they will need to spend on a child each year, with the actual average being around $13,000 per child.
One of the top reasons for an argument between couples is money; however, with the right tools and resources, you and your spouse will know all the dos and don’ts associated with budgeting together. It may be a challenge, but learning how to communicate with your partner correctly can make the parenting adventure much more comfortable.
Do: Learn How to Communicate Together
While it is true that most couples argue about money, learning how to communicate about finances with your spouse is essential for both your budget and financial health! You will need to learn how to have the right conversations with your spouse before creating your budget, as both of you need to establish financial goals. Some questions to consider together include, “How much should we save for retirement?” “When should we begin creating a college fund for our child?” and “Should we take out a loan if we are struggling?” Visit here to learn more about getting a loan when you need it. What are both of your wants and needs?
Do: Set Up Your Budget Together
If you are new to budgeting as a family, you must learn how to budget together. Budgeting should be a team effort because you will both need to sort out the initial first steps. Together, it would be best if you established your combined incomes; that way, you know how much you have to spend monthly. After your income has been verified, both of you will need to determine your expected expenses for the month. If either of you has priority expenses that need to be planned, they should be retracted from your income as well.
Once your expenses and costs have been accounted for, you need to begin accounting for the costs of raising your new child. Understanding what these costs will be ahead of time will save a lot of trouble down the road.
In the beginning stages, you will need to budget for expenses such as new maternity clothing for the mother, all the vitamins and supplements that the doctor will recommend that the mother takes during a pregnancy, and classes needed to prepare for the birth of the child.
Some of these expenses may be covered by your medical coverage, such as prenatal care in-hospital, hospital stay costs, and wellness visits of the newborn, but things like a crib, diapers, and food will not.
Do: Learn to Plan Ahead
Life is full of unexpected occurrences, and unanticipated expenses can happen when you least expect them. Instead of getting caught off guard, you and your spouse should learn how to plan. That means allocating a certain amount of your combined incomes towards a rainy-day fund. That is in case a car breaks down, or a costly bill turns up.
It is a good and standard piece of advice to save six months’ worth of expenses in an emergency fund so that if something happens, you know that you and your child will be safe. As a new mother, ensuring that you will always have cash on hand to cover things such as diapers and baby food is crucial to feeling secure.
To build this emergency fund, you may find that you have to make sacrifices in other areas of the budget, such as discretionary spending, which may include costs such as eating out, movie dates, and other non-essential line items.
Once this six-month fund is created, however, ensure that it stays accessible in a savings account.
Do: Account for Decreased Income
Not everyone’s job offers paid, maternal/paternal leave, so if one has to leave their job to care for the new child for the first few crucial months, it is essential to plan for this lost income. If this is the case, begin saving sooner to mitigate this lost income and reduce financial stress down the line. With proper planning, this loss of income can only be a minor setback.
Don’t: Hold Things Against Each Other
While both of you should be holding each other accountable, it can be unhealthy to be overly strict with your budget plans. Leave some wiggle room for desirable spending. Rigidity with budget plans is often counterproductive to your financial goals! Be careful not to become resentful and look at financial woes as a mutual problem instead of naming blame.
Budgeting and parenting are stressful for everyone involved, but it is crucial to keep the end-goal in mind: to raise a happy and healthy child, and this is best done as a team.
Don’t: Point the Finger
Instead of giving in to the temptation of blaming your spouse, be encouraging and positive towards your partner. They are a member of your team and your best ally when it comes to reaching financial goals! Be sure to let them know you are on their side, even if you have the occasional disagreement. When allocating budget for things such as daycare and other child-related expenses, be sure to keep in mind that these costs are for the benefit of the whole family, and the reward more than outweighs the cost.