Here’s what you need to know about upcoming expenses and how to save money.
You don’t need to buy everything they try to sell
The mama market is full of products for you and your baby; some are helpful, and some are not. Talk to a couple of friends with toddlers to see which products they used, and what was purchased because it seemed “cute” but wasn’t put into action [1]. Also, babies grow and change so fast that many moms are eager to give away barely used clothes, playthings, and other baby gear their children have outgrown.
The one thing you should buy new is a car seat [2]. Register for higher-priced items like a car seat or stroller for your baby shower; your friends and family will be eager to support you with these purchases.
Estimate the costs of prenatal doctor visits and childbirth.
Typically, if you have employer-provided insurance, prenatal medical care, and an uncomplicated birth will cost you about $2,250 out of pocket [1]. Talk with your insurance provider to fully understand the costs you have to cover and how to choose a doctor within your network.
Research your tax breaks
Be sure to apply for the Child Tax Credit the year you have your baby. It is typically a $2,000 tax credit per qualifying child up to age 16. And if you use childcare, don’t forget to include those expenses on your taxes [3, 4]. Talk to your accountant or financial advisor to find out about what applies to your tax bracket and state.
Keep saving money
With the excitement of a new baby comes more than a few financial challenges, but putting money toward your retirement is still important. Your future self and your grown child will thank you for it.
You will also want to start a savings account for your child. It’s never too early to start their college fund! A 529, a state-sponsored college savings plan with tax advantages, may also be used for K-12 tuition or higher education degrees that are not a four-year college. A custodial account is another option, these types of accounts are more flexible but offer less tax advantages than a 529. Consult your accountant or financial advisor to weigh the pros and cons of your available options [5].
