Few moments in life match the joy of learning that you are expecting an addition to your family. Consider these financial tips as you plan for your new arrival.
- Revise your family budget to include baby-related expenses. In addition to the daily expenses for essentials like food and diapers, budget for increased health care costs and insurance premiums. There are numerous baby-cost calculators available online that can help you with this process.
- Obtain a Social Security number for your child. While there's no time limit on doing this, you'll need the number to receive the tax benefits designed to help offset the costs of raising a child. Social Security numbers are also needed to open a savings account in the child's name.
- Make adjustments to your W-4 form. Reevaluate your W-4, taking into consideration the additional deductions and how they may impact your take-home pay. Also, look into other benefit changes including health care and flexible spending accounts.
- Buy what you need, not what the baby books say. Chances are you don't need every item the baby books say you need. Can't decide what's essential? Ask friends or other new parents what items they couldn't live without, and which ones they rarely or never used.
- Buy gently used. Kids grow so fast that you'll find many pre-owned items still look new. Consider buying gently used clothing or toys. Used items are easy to find online or in local consignment stores. Once your child has outgrown something, you too can make a little extra cash by selling it. Because of product safety issues, items like car seats and strollers are best purchased new.
- Buy in bulk. You can save both time and money purchasing staples like diapers, wipes and formula in bulk. But be careful. You might need to go through a trial and error process before finding the right product, and sizes can change quickly.
- Ask friends and family for hand-me-downs. If you have friends or family with young children, ask if they have any hand-me-downs your child could use. Chances are good they'll jump at the chance to clean out their closets and help you at the same time.
- Make your own baby food. With a little time and a blender, you can save almost half the cost of store-bought baby food by making your own. There are numerous tips and recipes available on the Internet that make the process simple.
- Babies don't know how much you spent on something. When kids are young, they are often more interested in the box the toy comes in than the toy itself. Avoid the hottest new toy of the season and stick with the basics.
- Start saving for college now. Even if you don't have a lot to save, try to set aside something. Saving just $25 a week from birth to age 17 will yield nearly $30,000 at 3% interest. Also, consider talking with a financial professional about education savings plans – some of which may offer tax advantages.
A Fifth Third Investment Professional, located in your local banking center, can help you start investing in your family's future. To contact a Fifth Third Investment Professional today, visit a nearby Fifth Third Banking Center or call us toll free at 1-800-416-8714.