Baby’s 1st Year: Reduce the Financial Strain

It can be very easy to get overwhelmed with a new baby coming.  Everyone is excited to offer advice on what you “need” to have.  And after one trip to Babies "R" Us, you realize that baby supplies (while small and cute) aren’t cheap.  Here are some tips to keep the first year costs from ruining your budget.

  • Register for gifts before the baby.

I was hesitant to do this for our wedding, as well as for our baby.  I felt like registries were impersonal and like I was saying “buy this for me please”!  The fact is, people want to get you something you actually need.  Left to their own devices, they will likely get you clothes.  That is fine, but many people find themselves with an abundance of clothes – some of which are hardly used.  Family members and friends are thrilled to be able to chip in on a big-ticket item like a jogging stroller or baby swing.   Plus, registering is a great way to stay organized with what you want and what you have already received.

  • That being said - don’t overdo the registry!

The best book I got as a gift was “Baby Bargains”.  (I don’t receive anything for saying that).  Towards the back, they had a sample registry for a minimalist.  I just followed that list and knew I could supplement as needed.  It probably kept me from having to run around returning a lot of things with a newborn. 

  •  Resist the urge to buy or register for clothes.

Everyone loves buying baby clothes!  My advice - get your fix when buying clothes for other people’s babies as gifts.   You will likely get more clothes than you could have ever imagined and if you have to supplement, check out your local baby thrift store.  There are so many cheap clothes there that were hardly (if ever) used.

  •  More about thrift stores….

We had a thrift store near us while growing up.  All I remember was the horrible smell and outdated clothes.  Times have changed!  We have a baby thrift store down the street in Mission Valley that is incredible.  It has baby clothes, toys and even maternity clothes.  When our daughter was first born, she didn’t fit into any of the 0-3 month clothes we had.  So my husband went and bought a handful of newborn outfits for a total of $10.  She only wore the clothes for a couple weeks, so why pay 4 times as much elsewhere?  You can of course also check out Craigslist or swap with a friends, but the thrift store may give you more options in a pinch.

  •  Add a line item in your budget for miscellaneous kids items and stick to it. 

If you register and have a baby shower, you should have plenty of things for at least the first few months.  But after that you will be amazed by everything you need to keep buying.  By having a budget (as with everything) you are more likely to resist buying items that aren’t necessary.  If you don't use up your budget amount one month, save the difference.  You will need it for bigger items like the upgraded carseat at 1 year.

  • Start talking about college.

Yes, it is 18 years down the road, but most people need to get a college degree if not more these days.  You and your spouse need to be in agreement about what your intentions are.  Do you want to pay for your child’s undergraduate education?  What about graduate school?  Do you want them to work through school like you had to?  Do you want to plan for paying 50% of the costs?  Start saving now if you plan to foot at least some of the bill and there will be a lot less pain in the future.

  •  Set up a savings account and notify family members.

Whether it is a 529 or other savings plan, let your friends and relatives know you set something up for your child.  A contribution to the account is a great idea for holidays or a child’s first birthday.  When kids are that little, they can’t really appreciate tangible gifts anyway.

  • Meet with a financial planner.

If you haven’t already met with a financial planner, get moving!  It will be so helpful to have your family goals and financial plan in writing so you can stay focused during this incredible but busy year.