If you are a first-time parent, then you need to read on

If you have become parents for the first time, then it could be a tough time for you financially. The arrival of the first-born is very exciting, but also financially draining. Medical bills, baby shopping, baby food, baby help, all this can be very expensive.

You need to make a budget to factor in the baby. A financial plan will help you to have control over your spending.

Here are some tips to help you keep a check on your expenses:

 

  • Check out your income

What is your total income? Both you and your spouse need to figure out where all your joint earning is coming from. Other than your salary, you might be getting interest on fixed deposits, rental income, monetary gifts from parents and friends, etc. Take all that into account.

 

  • What are you spending on?

What do your expenses look like? Track your spending and figure out if you are incurring wasteful expenditure. Write down all the expenses. Some of them might surprise you. Then eliminate the unnecessary ones.

  • Make a budget for your baby expenses

Having a child means more expenses. You will be spending on new categories. New expenses will suddenly emerge. If you make a budget keeping in mind your present monthly expenses, and the projected expenses, you will get a grip on your finances.

  • Prepare a contingency fund

You must create an emergency fund that is supposed to take care of those emergencies that can come up unexpectedly. Put aside some money to take care of at least four to six months of your expenses. Separate your emergency fund from your savings and investments.

  • Review your budget from time to time

Do not get stuck over the provisions of your budget. Keep it flexible. If any factor changes, you need to change the budget. A budget should be treated as a guideline, and not as the last word. Review it from time to time, and make changes that you might think are necessary. However, do remember not to tinker with the budget too often. That would be self-defeating. Try to stick to the budget as much as possible. Make a change only when necessary, not just because you feel like spending on an expensive gift to yourself!

 

 

 

Next Story