This was originally published on Monday, October 26, 2015, in the Pacific Daily News. Click here to subscribe to the PDN.
Babies are literally a bundle of joy, but there is a lot of necessary preparation when a baby comes into your life. Financially, you are faced with having to make some major adjustments.
We want our children to go to college and not have to worry about tuition or books. The truth is college is expensive. Just imagine what it will be in 17 to 18 years. Many parents want to start a college fund and you certainly should if you have the resources. Although a college fund is ideal, a retirement fund for you and your spouse is foremost. Children can get scholarships, grants or work while in school.
Is your house or apartment ready for the new member of the family? If you already feel cramped in your home it may mean that you will have to search for a new place. Besides the price to purchase or rent you should consider the distance from work to home and the proximity to schools. Moving is expensive and labor intensive. It will be much easier if you can get it done before the baby arrives.
Just as your house may not be built for a family, your car might not either. It may be time to turn in that pickup truck, motorcycle, or two-seat sports car for a more practical vehicle. There are good deals at dealerships when the new models are coming out. There are also second-hand vehicles that can fit right into your price range.
Keep it fun
Although I have mentioned a lot about saving, you should also have some fun. In your monthly budget, plan on having date nights with your spouse and save for family vacations. You should enjoy life as well.
Learn to cut costs
One of the most expensive items you will be purchasing is clothing. Kids grow out of clothes very quickly. It is so tempting when you walk through the baby clothing section of a store. Right now your kids know nothing about name brands or if the clothes are second hand. Family members often pass clothes on. Look at thrift stores as well. You will be surprised how much you can save. Toys are another expense that can get out of hand. Just like with clothing, look into toys family members are passing along or look at a thrift store.
Of course breast-feeding is a personal choice. But from a financial standpoint it also saves a lot of money. Baby formula is expensive. Breast milk also has many health benefits that formula cannot provide. As your baby gets older and starts into baby food, consider making your own. There are some very good food processors out there that can grind food down so it is easier for babies. You can find many recipes for all stages of development online. Homemade baby food prepares children’s taste buds to real food and is also free of preservatives.
Learn how to use coupons and look for sales. Diapers are not cheap. A coupon, no matter how small the savings, will eventually add up to be significant. Buying in bulk is also another way to cut back on expensive diapers. Be careful not to stockpile the diapers. Babies seem to grow out of diapers almost over night.
Ask for help
Ask your family and friends who have children how they manage. They may have some great ideas that you may want to implement.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at email@example.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.