How much do you think it costs to raise a baby in its first year? According to NerdWallet, for a family with a $40,000 household income (the U.S. average was $55,775 in 2015 per the U.S. Census Bureau), the cost can be more than $20K! And for households at the $200K household income and above, that amount can be more than $50K. For example, diapers alone can run $900+ and formula over $2k in the first year, alone.
Whether you already have a baby (or two, or three, or…) or if you are planning for one, here are a few money-saving tips from Tot Squad Founder and CEO Jennifer Saxton, who shared this information on her recent taping of The Doctors (airdate May 17, 2017).
If you are planning to start a family, it’s a good idea to start saving at least two years in advance. Here are some additional tips:
Plan ahead! Understand your benefits like maternity coverage and insurance deductibles. Then establish a separate savings account and set up direct deposit from your paycheck so that you never “miss” the money.
Take advantage of Roth IRA and 529 college savings plans, which enable you to save money tax-free. Some employers will even match your IRA contribution. At a minimum, an online savings account is essential. Look for one that offers a high interest rate and is secure and flexible. See Credit Donkey's top 5 picks here.
Don’t be afraid to purchase used gear or accept hand-me-down gear, with the exception of course, of car seats. NEVER buy a used car seat or accept a hand-me-down car seat unless you are 100% certain of its history, meaning that it has never been in a car accident and is not expired or recalled.
There is a ton of baby gear for sale in your community – check Facebook mommy boards and Craigslist. Often times, gear is incredibly well-maintained or only “gently” used. Squeamish about second-hand gear? You can always clean second-hand baby gear yourself or have it cleaned by a professional service like Tot Squad.
Look for convertible car seats that can grow with your child and offer the greatest value. The Rainier from Diono, for example, can accommodate your child from 5lbs to 120lbs.
BEWARE THE “ON DEMAND” CULTURE
Lastly, if you are planning to have a little one, take small steps like curbing your spending habits. We live in an “on demand” culture that makes it all too easy to spend money, freely, but being conscious of this is the first step towards saving money. Don’t want to spend your whole budget on UrbanSitter.com for last minute babysitters? Consider living near family who can help ease the burden of childcare expenses.
Have other tips for our expectant parents? We’d love to hear from you! Share it here.