Thinking of having a baby? 3 things to keep in mind
You’re ready to take the next step and grow your family. Here are some tips to help you get started.
Oct. 13, 2022
5-minute read
Expanding your family means a lot of changes are on the horizon. As you prepare for this new chapter in your life, there’s a lot to look forward to. Here are some money management questions to help you get prepared.
Do you know what your new budget will look like?
It’s no surprise that a baby will add new expenses to the family budget. Some are one-time big-ticket items like a crib or stroller, and others are smaller, more frequent purchases, like diapers or formula.
According to The National Diaper Bank Network, in their first year alone, a baby can go through 300 diapers a month. That’s over 3,000 diapers a year!
While you anticipate the arrival of your new bundle of joy, it can be helpful to list out the one-time and recurring expenses you’ll need to help you and your family prepare.
Here’s a list of common expenses for parents with newborns:
Big one-time expenses
- Crib: $50 to $2,500+
- Change table: $200 to $400+
- Highchair: $85 to $400+
- Car seat: $150 to $450+
- Stroller: $250 to $3,000
- Rocking chair for feeding: $300+
Total: $1,035 to $7,050+
Monthly expenses
- Diapers: $70 to $80
- Formula: $100 to $350
- Hygiene products: $50 to $100
- Clothing: $76 per month in the first year
Total: $296 to $606 per month
It’s important to get familiar with your new budget and find ways to rework it. While you’ll have new expenses, you might not be spending as much on dinners out or vacations for a while. For help getting a handle on your budget, check out online tools like our budget calculator.
When it comes to your income while on parental leave, make sure you take advantage of all the support available from your employer and the government. In Canada, maternity leave covers mothers for up to 15 weeks. Parents of a newborn or newly adopted child can also apply for parental benefits for up to 69 weeks, which can be shared between parents. Your employer may also offer some type of financial top-up. Plus, don’t forget to see if you’re eligible for the Canada Child Benefit Opens in a new window..
Are you prepared for an unexpected expense?
Sometimes life throws you a curveball, which is why a good guideline is to put away at least three to six months’ worth of expenses in an emergency fund. Although, if you find yourself in a position where saving six months’ worth of expenses feels stressful, don’t panic. You can start slowly and put away as much as you can at the time. It will add up and you’ll be glad you started.
Setting up automatic recurring transfers to a savings account is one of the easiest ways to build an emergency fund. Aim to transfer a set amount each month or every payday, even if it’s small. If you can occasionally afford to add more, your savings grow even faster. It will gradually add up and is one of the simplest and most important ways you can help you and your family be financially prepared.
One of the most important things a new parent can do is identify their support system. Family members, friends and community members can all play an integral part in your journey. Allowing others to help you is such an important part of self-care, whether that’s accepting a meal delivery from friends, or offers from family to watch the baby while you catch up on sleep. Plus, your support system might include people who have already raised a newborn and can gift you with their baby necessities like clothes, a crib, a stroller, etc. These kind gestures can make a big difference to your overall budget.
Don’t forget about the power of social media. Online groups for new parents are amazing communities filled with resources for expecting new parents. They’re a wonderful source of connection and support, but they can also double as marketplaces, where members can buy and sell used baby items. This is a great way to spend less on baby essentials and even make back some of the money you've already spent.
Lastly, make sure to find time to celebrate! It’s important to get together with loved ones to celebrate your upcoming bundle of joy in whatever way makes sense for you. Whether it’s a baby shower, gender-reveal party or a “sip and see” — an open-house style celebration for guests to meet the baby — make sure you choose an event style that speaks to you and soak up the love and support from your family and friends.
Perfection is overrated anyway
While preparing financially for a baby is a good idea, there’s no “perfect” savings amount to strive for. If you’re prepared to re-evaluate your budget and look into alternative options for support, you’re on the right track. Remember, it takes a village!
Need some financial advice?
Book a chat with one of our advisors. They can help set you up for success, today and into the future.
