Posted On: January 16, 2025 by Prevail Bank in: Banking
Becoming a parent is one of life’s most exciting and rewarding experiences. It also brings new financial responsibilities that can feel overwhelming. With proper planning, however, you can confidently navigate this new chapter. Here are some practical money tips to help new parents prepare and thrive financially, along with ways Prevail Bank can support you.
1. Create a Baby Budget
One of the first steps to financial readiness as a new parent is creating a realistic baby budget. Start by listing essential items your baby will need, such as diapers, formula, clothing, a crib, and car seat. Don’t forget to account for ongoing expenses like baby food and medical checkups.
Beyond the essentials, factor in potential costs for childcare if you plan to return to work. Researching daycare options early can save you stress later. Additionally, leave room in your budget for unexpected expenses—babies can be unpredictable!
How Prevail Bank Can Help: Consider opening a Cash Back or Simply Free Checking Account to manage baby-related expenses.
2. Start an Emergency Fund
Life with a baby is full of surprises, and having a robust emergency fund can provide peace of mind. Financial experts recommend saving three to six months’ worth of expenses, but if that feels daunting, start small. Even setting aside a few dollars each week can add up over time.
How Prevail Bank Can Help: Use our online transfer tool to set an automated amount to be transferred into your emergency fund each month. (To learn how to set this up, go to Prevail Bank’s Online Banking Video Tutorial.) Or turn on our Savings Makes Cents program - your debit card purchases are rounded-up to the next dollar, and the change is transferred to your Savings account.
3. Review Insurance Policies
A new addition to the family means it’s time to revisit your insurance coverage. Start by updating your health insurance to include your baby. Notify your insurance provider within the specified timeframe, typically 30 days after birth, to ensure your child’s medical needs are covered.
Life insurance is another critical consideration. If you don’t already have a policy, now is the time to secure one. This isn’t for you, but for your child. If something happens to you, you want that peace of mind that s/he will have the monetary funds to be cared for. Disability insurance is also worth exploring to protect your income in case of unforeseen circumstances.
4. Plan for Future Education
If your income allows, it’s never too early to start saving for your child’s education. Opening a 529 plan is a popular option that offers tax advantages while allowing you to save specifically for education expenses.
How Prevail Bank Can Help: Ask about our financial product options, Certificate of Deposits (CDs), and/or First-Step Savings Accounts for youth under age 18.
5. Minimize Baby Gear Costs
The cost of baby gear can add up quickly, but there are plenty of ways to save without compromising quality. For non-safety items like clothing, toys, and furniture, consider buying secondhand or accepting hand-me-downs from friends and family.
Safety items, such as car seats and cribs, should always meet current safety standards. When creating a baby registry, focus on practical essentials to ensure you receive items that truly make a difference.
6. Track Expenses
Parenthood can be a whirlwind, but keeping track of your spending is crucial. Use a budgeting app or create a detailed spreadsheet to monitor where your money goes each month. This will help you identify patterns and find areas where you can save.
How Prevail Bank Can Help: Take advantage of Prevail Bank’s free Credit Sense program. In addition to providing you instant access to your credit score, it can also provide you a budget analysis after completing a short assessment and helpful educational tools to improve your financial management.
Final Thoughts
Welcoming a new baby is a joyful experience, but it’s also a time of significant financial change. By creating a budget, building an emergency fund, and planning for the future, you can set your family up for success.
Contact us. We want to help you and your family succeed.
