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Creating a Baby Fund for Your New Arrival

Becoming parents for the first time last year has been the biggest change in our lives. As other parents will tell you, it’s a joy and a responsibility to raise a little one. One of the first decisions we made when confirming the big news was starting a baby fund for our little one and our family.

Why Start a Baby Fund?

Some may wonder if we had any savings before we became parents; we did. Up until that point we were comfortable with the few months of expenses being covered by our emergency fund. When we found out we were expecting, though, we felt the need to increase the safety net.

For one thing, I’m self-employed which means any time I take off for maternity leave would basically mean no income from my business. Though we expected some monthly expenses to decrease (less eating out for example), we also assumed that we would need a buffer to help us as we get adjusted to being parents.

How Much Do You Need In Your Baby Fund?

The next step to creating a baby fund is to figure out how much you want to save up. Of course, your needs depend on your specific family’s circumstances. However, here are some baby related expenses to consider when calculating the amount that is right for you:

Doctor Visits/Delivery Costs: Our visits to the obstetrician’s office was thankfully manageable. We talked to our family and friends who had babies recently to get a ballpark figure of what to expect for delivery costs.

We also checked with Human Resources with my husband’s company to know what would be covered and what wouldn’t be. The total costs (for the prenatal visits and delivery at the hospital) came out to about $2,500.

Diapers: Your preferences with diapers (disposable or cloth) can have a big impact on your expenses. Cloth diapers are more upfront, but it’s pretty much a one time cost. Baby Cheapskate and other sites like it can help you snag a great deal on cloth diaper sets, further lowering your costs.

Disposable diapers can be expensive in the long run. One tip I’d offer if you decide to go disposable is to use subscription services like Amazon Mom to have your diapers sent over to you and you can save around 30%. Our diaper costs have been around $20/month (not counting wipes – which can be found at stores like Costco for a great deal).

Food: Whether you breastfeed or formula feed, food is an expense likely to increase when you have a little one (though it doesn’t have to be by much). For many parents the money they save from not eating out as often evens out the higher food costs. If you buy formula, use sites like the ones I mentioned in the diaper section to get bulk deals. It can amount to significant savings.

Baby Gear: We had some money set aside for any items that we’d need that we didn’t get at the baby showers. Each little one is different so don’t be in a hurry to fill out all the gaps until your little one has arrived. You may be surprised at how little you’ll need. The money saved can be used for other baby expenses or you can put it into a college fund.

Childcare: For many families, this is the biggest expense if both parents work. Use the time before the baby arrives to compare which options are best for your family’s circumstances and goals. Daycare varies greatly throughout the country, so please get local estimates.

I’d also like to mention that if you’re doing a baby registry, please include gift cards on them. It can help you reduce the money you spend and help save up for certain baby expenses and give you some flexibility on how to spend it.

How to Save for the Baby

For the two of us, automated transfers and savings were the main strategy. Whenever we got a windfall such as a tax refund or bonus from work, having an automated deposit or transfer has helped us stay on course. We also looked at ways to cut back on expenses on our monthly budget and transferred the money into savings.

Thoughts on Building a Baby Fund

Whether or not you start a baby fund as something separate from your other savings is up to you. The thing to focus on is having a safety net to help you make the transition into parenthood. If you’re looking for more information about baby expenses, please visit Couple Money where we and other parents have been sharing their own stories, tips, and advice on what works, what doesn’t, and what’s not worth stressing over.

QB-Xpert

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Posted by on 11/09/2012 in Finance

 

9 Money Saving Tips for Couples

For many people, 2012 is rushing through like a train. If the two of you haven’t made much progress on your goals, there is still plenty time left this year for the two of you to achieve a milestone together. To get you started I wanted to share 9 money saving tips.

Saving Money Around the House

Saving money starts at home. There are ways you can lower your monthly living expenses.

Refinance your mortgage. For most people their mortgage payments are the biggest expense. Check to see if you can refinance your home mortgage to a lower rate. Right now, you may be able to get your home mortgage rate in the 3% range.

Optimize your electricity. With summer weather already here in some parts of the country, running the air conditioner from now until the fall will eat up your utilities’ budget. Try to cut back on your electric bill.

Cook (and grill) more. Summertime is perfect for cookouts. Eating with family and friends at home from your grill can be a great way to have a fun time without breaking the bank. Burgers, kabobs, and grilled chicken are easy meals to make and taste fantastic off the grill.

Have a home garden. You can boost your meals with some fresh items from your little garden. It doesn’t have to complicated – one year we just had herbs and some peppers.

Review your cable bundle. Check and call your current provider to see if they have any promotion specials you can take advantage of. We recently did this with our internet and cut our annual expenses by $200 while increasing the speed!

Shop around for cell phones. If you’re looking for the best value with cell phones with some flexibility, check out prepaid providers like Boost Mobile or Go. You can get some pretty good deals on plans and get the same coverage from the major providers.

Keeping Transportation Costs Low

The next biggest expense for couples are their cars – car loans, maintenance costs, and gasoline expenses can all add to a sizable chunk. Taking a few steps can help the two of you shrink your expenses.

Skip on the car loan. If you’re thinking about shopping for your next vehicle, consider saving before getting a car loan or lease. We manage to save cash for our last few cars and recently found a deal on our family’s Accord. While you’re shopping for your next car, look at gas mileage and weigh it against the price. You can come out ahead both with the upfront purchase price and with the long term ownership costs.
Improve your gas mileage. You don’t have much say about the price at the gas pumps, but you can lower your fuel costs significantly by increasing your car’s gas mileage.
Shop around for car insurance. Ever so often we get quotes on our car insurance to make sure we’re getting the best value. Even if you’re happy with your company, it pays to double check and make sure you’re getting discounts you’re entitled to. Being Costco members helped us to decrease our insurance premiums significantly.

Your Money Tips

How about you? What goals do the two of you have for this year and beyond? How are you saving money?

QB-Xpert

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Posted by on 15/08/2012 in Finance

 
 
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