Financial Planning Tips When Expecting a Baby

First time parents are expected to go overboard with preparations once their baby is on the way, be it expenses on baby clothes, accessories, nursery decorations, baby showers, etc. Shortly afterwards, the initial excitement wears down and the nine-month gestation clock starts ticking until D-day. This is when the realization of the extra cost of having a baby sinks in. This is the time when would-be parents start thinking about all the prenatal medical expenditure, expenses towards hospitalization and delivery, pediatric medical expenses, baby food expenses and money spent towards buying clothes, toys and education. I know the list is long and might seem like a money monster which will take away all the excitement of fine dining and shopping that you experienced before the baby came into picture, however, I wish to assure you that some of the financial planning tips listed below will surely ease your journey.
How to Save Money When Expecting a Baby
One of the biggest expenditures for children generally happen to be towards their education. But even before your baby is born, there are heaps of expenses to be dealt with. Here are some ideas to help you deal with these expenses.

Prenatal Medication
As soon as the pregnancy test is declared positive, would-be parents need to start shelling out money towards medical tests, ultrasounds, fees of gynecologists, nutrition supplements and so on. The uphill burden of expenditure can be reduced by opting for a health insurance policy right from the time you get married or start planning your baby. The health insurance company generally expects policyholders to pay a minimum amount towards each medical bill while the rest of the medical expenses are borne by the health insurance company. As a thumb rule, check if your hospitals, gynecologists and pharmacies accept the insurance policy that you have. If not, then I recommend that you search for medical services that have a tie-up with your health insurance company before you set up an appointment. This will help save a lot of money.
Preparation for Baby
It is delightful to go shopping for baby clothes, cribs, car seats, strollers, baby monitors, etc. Some of you might even redo an entire room, converting it into a nursery. As exciting as it seems, babies tend to grow very quickly and it is therefore futile to spend a huge sum on new and expensive baby clothes. Even doctors recommend usage of soft, tender and used baby clothing on babies.
Personally I suggest that you may opt for borrowing baby clothes, cribs, strollers, etc., that have been previously used by your friends for their babies. And if you are lucky enough, you might receive some new accessories for your nursery as baby shower gifts. I can’t help mentioning a noteworthy fact about pregnancy in advanced stages. The recommended restrictions of movement and food consumption for a pregnant woman are likely leave a considerable surplus of money in your kitty.
Delivery
As previously mentioned, couples might have to be careful while selecting hospitals for the upcoming childbirth. It is ideal to get confirmation about the hospital’s tie-up with your health insurance company way before the due date. It is also recommended to get similar confirmations from the obstetrician and anesthesiologist before you appoint them for the delivery. This will help you save a huge sum towards delivery and hospitalization expenses. The arrival of a baby is a wonderful moment. But it is suggested that you find some time to check with the health insurance company for possible addition of your newborn child under health benefits. This might mean an additional expenditure towards premium, but trust me, it is well worth the expenditure. After all, there might be – god forbid – some unforeseen health expenses for your baby.
Baby Arrival
It is quite common for both partners to be working professionals. As soon as the baby arrives, the maternity leave and paternity leave begins. This means that the family income decreases considerably as long as one parent stays at home as a caregiver. It is ideal to refer to the policies of your organization to make sure if they have an option of paid maternity or paternity leaves. At times, organization offer a maternity leave allowance instead of a full salary payment. This stage also marks a steep rise in expenses towards baby food, diapers, pediatrician visits, toys, day care charges or baby sitter charges. These expenses could range anywhere between $1000 to $1200 each month. Accordingly, money needs to be religiously set aside for such payments by both the partners. If you happen to be a single mother, then you have the option of applying for single mother financial aid too.
As the Baby Grows
Before you even realize it, your baby will become a toddler ready for play school. Personally, I suggest that this is the best time to invest in a good education plan for your child that will help secure his or her higher education needs. Such plans are designed keeping in mind the growing inflation rate of the economy. If you love to plan about your every penny, then it is best bet to start saving at a slow rate right from the time you get married. By the time your child is ready for school, you will be surprised at the huge amount you will have saved by then.
Financial planning is a must at all times. At the prospect of arrival of a baby, even the most spendthrift partners start getting calculative. Early planning and budgeting can help couples avoid a lot of mental stress over finances after the baby arrives. This financial security can help you delve wholeheartedly in the realms of your newborn child.

Personal Finance for College Students

College is often a student’s first experience with total independence, and the natural tendency is toward hedonism. You will undoubtedly spend the first month or so methodically doing all the things you could never do at home. This is totally fine and completely natural (but keep it safe, guys) – as long as you calm down and get to work once the rebellion is out of your system. Because now you have to act like a grown-up person, with finances and everything.

Seriously, it’s incredibly easy to graduate college with a mountain of debt, and don’t assume you’ll snag a high-paying job right away – you won’t. So you’ll most likely be underemployed, badly paid, with crippling monthly bills. Then six months later, your student loans come due. Of course, you’ll get a promotion or a better-paying job eventually, but in the meantime, those bills are still due. It’s better to just avoid the debt in the first place.

Avoid Loans

Avoid student loans like the plague. Apply for grants, chase scholarships, work and save, do whatever you have to do to avoid loans. If you can’t afford your dream school without them, look into cheaper schools. Or, take your core classes at a community college (cheaper!), then transfer to the big school for the classes that really count. You’ll end up paying for fewer credits, but you’ll still have the fancy name on your degree (savings!).

Student loans last forever. It’s not unusual to graduate with over $100,000 in loans, and those payments start six months after graduation. And they can be as high as $800/month, or more. And you’ll be paying them off well into your forties. Every month. Whether you’re flush with cash or not. If you default, they can (and will) garnish your wages and take any tax returns until you’re paid up. Declare bankruptcy if you want, but the student loans stick with you. Defaulting also destroys your credit, so forget about ever owning a house, car or credit card. Oh, and the interest rates can be as high as 19%, so it’s actually possible to watch your balance climb as you make payments for awhile. Yeah.

Work

College is expensive, even on a day-to-day basis. If you can manage it at all, have a part-time job while you’re in school. Look for night jobs that won’t interfere with your classes, or try to schedule classes in blocks to leave the most free time. The trick is to not work so much that you don’t have time to sleep or study, because flunking out definitely doesn’t do you any favors.

Even if the pay is crap, having a few extra dollars in your pocket really comes in handy when you’re starving and the cafeteria’s closed. Or you need extra supplies for a project or something. Part of the point of college is to learn how to be prepared and self-sufficient.

Eat Smart

Don’t automatically buy your school’s meal plan – investigate first. Some school cafeterias are actually pretty expensive for three meals per day. If you’re allowed to have a mini fridge, microwave and hot plate in your room, you’re golden. Be a grownup and cook your own food. This will come in handy later in life.

Whatever you do, don’t eat every meal out, and limit convenience store runs. It’s tempting because you’re tired and overworked, but getting ripped off is never fun.

Credit Cards? Maybe.

Be wary of credit card offers. Discuss them with your parents first. Look for low rates and no annual fee. If you find a great offer, take it – but be responsible. Don’t treat it like free money, because it’s not. It’s helpful for real emergencies, like car repairs and medical issues, but do not rely on it for everyday expenses. Treat it like it’s not even there. Pay off your balance at the end of every month, and NO LARGE PURCHASES! Irresponsible credit card use is one of the quickest roads to bad credit and a lifetime of debt.

Being a penny-pinching miser during college is one of the best things you can do for your future (the other is graduate), but it can be hard. You’ll see people living it up, blowing money on booze, designer clothes, video games, cars, etc., and you’ll be jealous. But patience is its own reward – five years from now, those people will be asking you to cosign loans because their credit is shot and so is their car. Either that, or they’ll be taking the bus to the four jobs they need to work to pay off their debts.