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How to Financially Prepare For a Child
How to Financially Prepare For a Child
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Money Management

How to Financially Prepare For a Child

Eunniah Mbabazi
June 7, 2022

Nothing changes your life more than the arrival of a baby. You could be feeling anything from exhilaration and delight to fear or even dread.

Have you ever laid in bed wondering, "Will I be able to raise a child?" Is this something I'm prepared for? You're not alone.

Some people get stressed out at the thought of having a baby. The idea that there will be more mouths to feed, the clinic visits, the baby food and diapers that you have to buy so often, not including the cost of taking a child through the newly formed CBC curriculum in school, freaks them out.

But like every other thing in life, it helps to be prepared. The better planned your finances are, the better you'll be to navigate these costs without degrading your current lifestyle.

1. Reconsider Your Income

There is nothing wrong with doing what you love, even if it's low-paying. As they always say, "Do what you love, and money will follow."

But the thing that drives you matters. Being stuck in a low-income job because you are passionate and being stuck because of work inertia are two different things.

Some people wouldn't leave their jobs even if they got offered double their salary.

If you are not passionate about what you do, you have to get back to the drawing board. The same applies if you find your salary insufficient.

It would help if you took on a career that fills you with gratification, giving you the will to wake up every morning excited with your choice.

If your income is not flexible enough to accommodate a child, then perhaps you should consider looking for other sources to supplement your income

Read Also: 8 Ideas to Create Multiple Sources of Income 

2. Enroll in Health Insurance

Pregnancy is quite costly. So are delivery, clinic visits, and pediatric health care in general. Best if you could take good health insurance if there is a baby on the way.

The good thing is that you do not have to wait for your employer to provide you with it. There are other options you could explore. Take Linda Mama, for example. It's an initiative by the government of Kenya seeking to improve performance and efficiency in maternal and child health care. It's free maternity that allows expectant women to get access to NHIF benefits in a single package comprising antenatal care, deliveries, postnatal care, and care for the infant within one year.

Read Also: How to Plan a Stress-free Parental Leave in 9 Months

3. Revamp Your Budget

When you are single, you tend to spend money having pleasant times, maybe parties and dinners out. Just general entertainment.

Once you get a wife, your budget changes, and it changes again when you start having children.

This is very normal as your budget is not static. Your budget evolves corresponding to the changes that happen in your life.

A budget is key to proper planning. If you don't have one, create one. Look at your sending categories and think about ways you could start to spend less and save some more.

Read Also: 6 Simple Steps to Create a Working Budget 

4. Check Your Emergency Fund

We cannot predict when an emergency will occur or when you'll lose your job. These events could leave you without a source of income. And the stakes go a bit higher when you get children.

In the process of preparing to have a family, set up an emergency fund to ensure you are covered for at least three to twelve months.

The amount of money you save is dependent on how stable your income and expenses are. The more varying each is the more months of expense you should save. While a person with a steady income stream would require six months of expenses saved, a person with inconsistent income would require up to a year's worth of living expenses.

Of course, you can easily cut down unnecessary expenses like entertainment and a subscription to the gym, but needs like food and shelter are not up for negotiation.

Read Also: How Much Emergency Money Should a Family Have in 2022? 

5. Plan for Child Care

Child care is another thing you should think about when budgeting.

You need to explore some childcare options while the baby is on the way. Some options can be a nanny, daycare, or one of the parents could choose to stay at home.

It has so far been a convention that women are the ones to stay at home to look after the child, but there are situations emerging of men becoming stay-at-home dads for the first few years.

Whichever choice you make, you have to decide, plan and budget accordingly because maternal/paternal leave does not last too long.

Read Also: Hiring a Househelp: Money Rules You Need to Know

6. Plan for Baby Essentials

Baby stuff is expensive, but it is possible to save some money while getting second-hand.

The basic ones like diapers, need to be new for safety concerns, but for you to save some money, you could opt to buy them in bulk at wholesale prices instead of buying at the retail price.

If you do not have the financial muscle to buy in bulk, then perhaps you could pool resources together with other new parents to get them.

You can also ask around your circle of friends and family who have had kids recently for used baby stuff like a baby stroller, duffle bags, and toys.  

Whether used or new, get creative to save some money when getting them

7. Update Your Will

Your will does more than tell your family who gets your expensive assets after you die. It ensures the care needed by your child is taken care of even if you pass away prematurely. The will can express your desire for your unborn baby and can easily be changed with the changing aspects of your life.

You can draft a will in two ways:

By yourself. You can write one without a lawyer. You need to be 18 or older. You also need two people to witness your signing and ensure it is accessible after your death.

Hire a lawyer. This path is a bit costly, but a lawyer will do everything for you.

8. Rethink Your Housing

You have to start planning long-term. Think about the kind of home you'd want to live in for the next couple of years. 

Sure, you won't need extra bedrooms or bathrooms immediately since infants can sleep in your room for a while. But later on, they will move out of your room.

You may desire to get a larger house, so you'll need to start thinking about what that vision looks like and how to start saving for it

9. Rethink Your Transportation

If you and your partner have been owning a souped-up sports car, then you should think about owning a family-friendly vehicle. You could sell the sports car to get one or, if you can afford it, then get another that is more family-friendly.

But it is not necessary to own a car if you are having a baby. There are other options you can use, like public transport. But if you choose to have a car, choose one that fits your family and is reliable.

10. Invest to Help With Higher Education Costs

As time moves, kids grow and advance in their education. We all know how costly a university or college education can be, especially if your child is not getting any sponsorship aid. So it is best to have that in mind and start preparing early.

Small amounts of money invested when your child is at a tender age can grow into a considerable sum by the time the child finishes secondary school.

Find a suitable investment vehicle and start investing as soon as you can.

Wrapping Up

Whether you had planned to have a baby or not, without proper financial preparation, a child can bring a lot of disruption to your life in every possible way. But it does not mean that you have to build a solid financial base first to be ready to have a baby. Many families out there are not financially stable, but they still find a way to work things through.

Keep in mind that everyone's financial demands are unique. Ensure you're constantly using the optimal approach that works for you and your family.

Eunniah is an experienced business writer and editor. She is also a published author with two titles under her belt; Breaking Down and If My Bones Could Speak. You can find Eunniah on Twitter @Eunnyversal

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