Bringing a baby into the world brings many responsibilities, one of which is the management of your family's finances. A child will create many changes to your income and household expenditures. By getting your finances in order early, you can look forward to handling stress and the worry that new parents must face about money, that often times challenge the couple's personal relationship.
You should look into consolidating and reducing existing debts. It's very easy to accrue debts on credit cards, store cards and personal loans. Why not consolidate your existing debts into one place to reduce your monthly interest payments. You can consolidate debt from credit cards using a balance transfer offer such as 0% on balance transfers for 6 months. During these 6 months you should focus on reducing the debt as much as possible.
Another option is to try and make extra home loan repayments. If you have a home loan and are both currently employed you should use your dual incomes to make as many extra repayments on your home loan as you can manage before dropping to one income. Make sure your home loan has a free redraw facility so that you can pull any extra repayments back out at a later date should you need it. Even if you pull most of the money back out after you have the baby you will still reduced your interest payments in the meantime and further reduced the principle balance.
Health Insurance coverage can be a huge financial strain if the something were to happen. Having a baby itself can rack up big healthcare bills especially is there are any complications. If you don't have private health coverage you should consider taking it out government assisted health insurance before planning for a new baby. If you already have health cover, check the policy and ensure maternity cover is included. If not, you may need to upgrade or shop around for another policy that does cover having a baby.
Learn how to protect your current income. Although income, and life insurance is an an additional expense, it is seriously worth considering. Children can create larger than normal financial repsonsibilities. You need to be confident that your home loan could be paid off and essential costs such as education and living costs are covered in the event that an income is lost or something happens to one of you.
Most importantly think about the future. Saving for education and other future costs by starting a high interest savings account can be beneficial in the long run. Online only savings accounts often have higher interest rates and lower fees than tradtional banks. If you looking for bigger returns with a long term investment then you could look into managed funds or shares.
Think ahead!! Ask your self this question "Is your retirement plan working for you?" Make sure you have your entire retirement plan in one place to avoid paying multiple account fees. Look for retirement plans with low fees and strong performance results. The thought of your children growing up may seem a long way ahead but you need to get your money working for you now to ensure a good financial position for yourself.
Don't spend money when you don't have to. The great thing about having a baby is that friends and family are eager to help out. If your friends have had babies before, why not see if they have toys, clothes or equipment that they don't need anymore. Ebay, online classifieds and your local newspaper are also excellent places to find used baby goods. To save money of expensive toys that your baby will soon grow bored of, you can use local toy libraries for a small cost.
Don't get me wrong babies can save you money as well! While there may be no shortage of costs around bringing up a child, you'll probably notice you spend less money on entertainment such as going out to restaurants and bars, especially in the first years after having a child. Children provide plenty of "entertainment" and keep you occupied day and night.
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