The Update

Preparing financially for a new baby

Congratulations! You’ve just gotten the positive pregnancy test results and you’re breathless with excitement — and nerves. Or maybe you’re a few months along, and the mild panic is growing right along with the baby bump. Regardless, a baby means big changes, and some of those changes bring many new expenses. How will you pay for it all?

Whether you’re only thinking about having a baby, or your due date is fast approaching, there’s no need to stress about finances. By taking the necessary measures today, you can learn to cover these new expenses without falling into debt.

Here are some steps you can take to prepare financially for a new baby:

Pay down debt

There’s more than just a nursery to set up before your baby’s arrival. It’s best to get your finances in order to make it easier to manage all new expenses and prepare for your child’s future. If this involves getting rid of a mountain of debt, you can choose between these  debt-kicking plans:

The snowball method involves maximizing your payments toward your smallest debt balance first. Once it’s paid off, move on to the next-smallest debt, “snowballing” the payment from your previous debt into this one until it’s paid off, and repeating until you’re completely debt-free.

The avalanche method involves maximizing payments toward the debt with the highest interest rate and then moving on to the one with the second-highest interest rate until all debts are paid off.

Consolidate all your debt using an RGCU Signature Loan. This will take all your debt, put it into a lower interest rate loan where you would make one easy payment. 

Adjust your monthly budget

Babies don’t come cheap. When your little one arrives, you’ll need to spring for baby gear and furniture, a new wardrobe, diapers and possibly child care as well. The cost of raising a child is estimated around $12,350-$13,900 on child-related expenses before their baby’s first birthday.

Most of these expenses will be ongoing, and it’s best to make room in your budget for these new items before the baby is born. Spend some time reviewing your monthly budget to look for ways to cut back on spending and give you that wiggle room to cover baby-related expenses.

Estimate prenatal care and delivery costs

While exact amounts vary by state and by insurance provider, prenatal care and delivery can cost thousands of dollars. This includes out-of-pocket expenses, co-pays and insurance deductibles. Be sure to prepare for these expenses by saving up for them or by allocating a large windfall, such as a tax refund or generous work bonus, to be used for paying for prenatal care and delivery.

Start saving for college

Hard as it may be to believe, your little one will one day be all grown up and ready to go to college. With college tuition now averaging $41,411 at private colleges, $11,171 for state residents at public colleges and $26,809 for out-of-state students at state schools, according to data reported by U.S. News and World Report, this can mean paying a small fortune to give your child an education. In addition to spreading the costs over nearly two decades, starting to save for your child’s college education now will give those savings the best chance at growth.

Stop by one of RGCU's Branches to see savings account options that would benefit your child's future. 

Take Advantage of Financial Coaching

Are you looking for a more concrete plan for your finances leading up to your new addition? RGCU members can make an appointment for free financial  coaching. Our certified financial coaching can help you with money management, credit, and planning for the future. This can help you become more confident in your ability to manage money and increase financial stability.

Earn rewards when buying diapers 

New parents will need diapers. A. Lot. Of. Diapers. 

Luckily, if you use your RGCU Debit Card to purchase diapers you will earn points that can be redeemed for cash back, merchandise, gift cards, and more! RGCU Rewards are incredibly useful, especially for new parents getting the swing of parenting.