What to Financially Expect When You’re Expecting

When you first discover that you are expecting a child, you certainly have all types of emotions running through you. It is such a special time for you and your partner. Although preparing for your child is exciting, this period also entails some important factors to examine. One significant difference now will be with your finances, since you now need to care for one more additional family member. This factor can cause stress for many preparing couples, especially when they first analyze it. When you understand precisely what you need to expect financially, you can better know how you will handle your money.

Update Your Household Budget

You most likely have had a budget with your partner for as long as you can remember. When you are expecting an addition to your family, this causes a more considerable change in your budget. It is impossible to stick with your current budget, and it needs to be adjusted according to your finances. Although you do not need to start from scratch, some significant areas will need updating. Take the time to examine how much your new child’s costs will be. You can estimate this based on their necessities. Suppose your budget right now is perfect and it would be too tight after you make these adjustments. In that case, it will be necessary to make further changes in your financial life, whether using less of your income in some areas or finding alternative ways to make more income.

Start An RESP Account

As you think about your coming child, the thought of their RESPs may come to mind. Although this is optional to set up before they are born, it offers many more pros than cons. When you plan which bank, account, and payment plan you want to set up, you can get this out of the way when your child is born. It will also provide your child with a couple of extra months of savings payments, which could significantly enhance the amount in their RESP account when they turn 18. Although they will not appreciate this savings account until they are adults, they will be so thankful that you started when they were so young.

Have a Leave of Absence Plan

Depending on your employment, your company may provide a paid, partially paid, or non-paid leave of absence. You need to know what it is well before you give birth. In Ontario, you could receive up to 12 weeks off before delivery and 17 after. If you are still paid, you will not need to worry about your income during the weeks you are not working. If you are still partially paid, examine if you and your partner can still get by through the weeks you are off. If you cannot, then establish if your partner could either work longer hours or you could cut back on your expenses for a short period. If your employer does not cover any of your leave, then this may be nerve-wracking for you. In this situation, try taking advantage of as many vacation, sick, or leave of absence days as to still receive some income.

Pay Off Debt

Preparing for a child and the required expenses are stressful for most couples. Many people have all sorts of debts, especially from their education. They can heavily weigh on your mind if you have debt or other unpaid expenses. The thought of oncoming expenses, along with these current debts, may be too overwhelming. To ensure that you can be fully prepared as your child is born and in the following weeks, try paying off some of these debts beforehand. Getting some smaller ones off your plates and beginning some more enormous debts can help you with your financial situation and prioritize your family’s well-being.

Avoid Over Buying

Many couples are excited to go shopping for their little one when a child is on the way, especially their first. This includes clothing, bedroom decorations, furniture, and other necessities. This period should be a particular time between you and your partner. Yet it can be easy to overspend on some items, especially if they are unnecessary. Even at baby showers, there can be the chance of too many unessential things being brought. Each parent has to decide what is important and special to buy for their child. Financially, plan how much you want to spend on different categories, such as how much the project will be to create their room. If someone is planning a baby shower for you, try and make a list of items that people could bring, which you will for sure need. This could include diapers, wipes, and bottles.

These factors certainly give you an idea of areas to start in your preparation. But are you still anxious about where exactly to begin with your partner? If so, do not worry. When you have open communication, you can decide what small steps to start with, which will assist you in making the larger decisions.

Sources

-Brooks, Melanie (2019). What to Expect (Financially) When You’re Expecting. Her Money. Retrieved from https://hermoney.com/connect/motherhood/what-to-expect-financially-when-youre-expecting/

-Sillers, Jessica (2022). Pregnancy Money Moves: Financial Steps For Expecting and New Parents. Money Geek. Retrieved from 

https://www.moneygeek.com/family/resources/financially-preparing-for-a-baby/