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Having a baby can be an exciting time for you and your family. Considering the average cost of raising a child is approximately $260,000, it can also be scary! Use some of our tools and tips to put your family’s best foot forward towards a sound financial future.
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If you’re new to budgeting, it is recommended to divvy up your income with the 50/30/20 approach. 50% for needs such as household bills, minimum loan payments and expenses such as childcare, diapers and formula. 30% for financial wants such as gym memberships, travel, or perhaps that morning cup of Joe from Baltimore Coffee and Tea. Finally, the last 20% should be for savings and payments on toxic debts, such as payday loans and credit card balances. This split is a goal to shoot for! You may miss here and there, but the objective is to track your spending and aim for improvement.
Don’t rush to save for college right away! Although a college savings is important, the cost of your immediate and future financial security should take the cake. Focus on ensuring an emergency financial security blanket to ensure you have plenty of cash to cover unexpected expenses. Once you have a small amount stashed away, your priorities should be as follows: retirement, payoff toxic debt, contributions to emergency fund, and finally education expenses. Once you have made progress on these important financial priorities, you can begin planning for your little tikes education!
Sometimes there may not be enough! Increasing your income and cutting expenses are the two primary ways to balance your new budget. We know…this is easier said than done! Difficult decisions sometimes have to be made to accomplish our financial goals. These decisions could be as simple as picking up more hours at work, selling your car for a more affordable one, refinancing your mortgage, shopping for insurance costs, or eliminating unused subscriptions or streaming services.
