If you’re planning for a new baby, congratulations. It’s exciting to be welcoming a new family member. Of course, they may be little, but they can also cost a lot – and often, you will be on a reduced income for a period of time.
So how can you keep the budget on track and still ensure you have all the necessities (and a few treats) for your new bundle of joy? We’ve combed the Internet for some tips to help you out.
Create a plan
The sooner you start, the more prepared you can be. Putting away a little over several months is less of a strain than only having a couple of months to prepare.
Talk to friends and experts about the things you really need to have for a baby, and then the things that are nice-to-haves, but not really necessary. Make a plan for what you will be buying and when you will be buying it. If you have a plan, you may also be able to let friends and family know what you still need, if they wish to contribute either as a baby shower or baby welcome gift.
Cutting back costs
Baby stores are filled to the brim with cute and must-have items. But there may be opportunities for you to relax the strain on the bank account by going second hand. While some things are better off new, such as baby mattresses, many other things can be bought second hand in great condition, at substantially lower prices.
Baby mobiles are a good example of that, as they tend to retain a ‘new’ look. If you really want to have that special baby nursing chair, but can’t fit it into the budget, economising on other areas may help you get everything you need – and some of the things you want.
Try the ‘one income’ lifestyle in advance
Before your baby arrives, it may be a good idea to “stress-test” your budget by trying the one-income lifestyle for a while. You can use the additional funds to build an emergency fund, and if you find out that it’s too hard to make do on one income, you can still adjust your budget and cut the unnecessary costs.
If you have some consumer debt, you might want to use some of the second income to pay that off, so you’re not struggling with debt as well as the additional costs when the baby comes along. Alternatively, if you think you need to upgrade to a more family-friendly car, consider saving all second income to buy the car with savings, rather than a car loan, to keep your finances on track when there’s just one income.
Make the most of your accrued leave
You don’t know what the future holds, so rather than hold some leave for possible future needs, use it before you go on maternity leave. It might be a nice break before the baby comes to use your annual leave and get those last-minute jobs or visits done and dusted.
Don’t forget about the future
When you are off work, your KiwiSaver contributions stop as well as your income. Although it may be hard to make ends meet, consider still putting enough money into your KiwiSaver account to earn the maximum Government contribution.
You need to contribute at least $1,042.86 from 1 July to 30 June to receive the maximum contribution amount of $521.43. But even if you put less than that into your account, you will still receive 50 cents from the Government for each dollar you contribute.
It may not sound like much, but it could help towards your long-term future and keep you on track for a KiwiSaver Homestart grant down the line.
Need a bit of extra help?
If a debt consolidation loan would help ease your budget and get your finances on track before your baby arrives, talk to us. We’re here to help.