First Bank of the Lake: Financial Planning Tips For New Parents

Ask any parent, and they'll tell you that raising children comes with a great deal of financial responsibility. The most recent data on the total cost of raising a child is from 2013, at which point the U.S. Department of Agriculture estimated the cost of raising a child from ages 0-18 to be $245,340 (not including the cost of college tuition). While new estimates have not been published, we imagine that that number has significantly increased over the three years since its initial publication.

With so many thousands of dollars going towards your newest family member, it is important that you be proactive in your financial planning. Our bank at the Lake of the Ozarks is here to help with these simple but critical financial planning tips for new parents.

Financial Planning Tips For New Parents

1. Create A Safety Net
As soon as you find our you're expecting, you should make building a financial safety net a top priority. Having a financial safety net can make a world of difference if unexpected complications arise that may require more costly medical bills or that the mother spend more time away from work. At a minimum, we recommend building a safety net that could last you six months in the event that both parents were to lose their sources of income.

2. Build A Budget
If you have never kept a budget before, now is the time to start. From purchasing clothing, diapers, and other basic supplies to covering extra medical and healthcare costs, raising children requires many significant expenses. By creating a budget, you can track how much money you have coming in and what expenses it's really going towards. If you start to have trouble making ends meet, you can use this information to determine what areas you can afford to cut back in.

3. Start Saving For The Future
If you want to provide financial assistance for your child's future, such as their college education, it is best to start saving sooner than later. It takes time to build up a big savings fund, and the sooner you start, the more time you will have to accomplish it. You will also have the added advantage of extra time for compound interest to work to your benefit. Saving for your own retirement is also important; raising children may only get more expensive as your children get older, so it is best to start your saving habits while they're young.

Savings Tips For New Parents

Managing your finances strategically is critical, but it's only part of the puzzle when it comes to saving money while raising kids. Here are a few other suggestions to help you cut back on your child-rearing costs:

Opt for gender-neutral clothing. By sticking with green, yellow, and gray/black onesies, you'll be able to reuse the little outfits if/when you have another baby (regardless of the genders).
Purchase convertible baby gear that can be used for multiple purposes. Rather than buying separate rear-facing and front-facing car seats, for example, buy one that can be used for either purpose. Cribs that eventually morph into toddler beds provide another example.
Buy clothes with room for your baby/toddler to grow into them. Little ones often grow remarkably fast, so starting with a little extra wiggle room will help them last longer.
Shop at thrift stores. Even if it is in great condition, a pre-owned item will always be cheaper than a brand new one.
Use everyday items instead of "baby" items. For example, consider using an everyday backpack instead of a diaper bag. Many items that are specifically marketed to new parents are much more expensive than their everyday counterparts.

Remember First Bank Of The Lake For Your Banking Needs!

First Bank of the Lake is dedicated to your financial success. If you are looking to save money in preparation for your new baby, we invite you to set up a savings account at the Lake of the Ozarks at our local bank. We also offer IRAs in Osage Beach MO to help you save or retirement or your child's education. Visit our website to learn more about our financial services at the Lake of the Ozarks.

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