Congrats on the newest addition to your family! This is an exciting time; however, you may be worried about if this change in life will affect your budget and future financial plans. The best course of action is to brainstorm ways to cut costs and save for the future. Below is some new parent advice to consider as you navigate this rewarding (and exhausting) chapter in life.
New parent saving tips
1. Budget, budget, budget
The best way to approach saving is by first figuring out a family budget. You may discover you were holding back on how much you could truly save. Or, you may realize there isn’t a lot of room for saving. For the latter, it’s important to identify any unnecessary expenses.
Is there an extra streaming service you don’t use often? Cancel it. What about your spending habits – are you shopping online for items you don’t really need? Nix the habit. A new baby is a big responsibility and may result in some spending changes for you and your partner. Be willing to make those changes to put yourself in the best financial position. Learn more about putting together a budget here.
2. Spot diaper deals
Ah, yes, diapers – the best part of parenthood! The only thing more fun than changing diapers is buying them. Luckily, there are ways to mitigate the cost. Keep your eyes peeled for coupons and sales by downloading apps to your favorite retailers. This will give you access to digital coupons and information about future sales.
- Tip: The best way to make money back on diapers is through credit card rewards . General Electric Credit Union’s (GECU) Visa® Signature1 and Platinum2 cards allow you to “cash out” reward points for gift cards or credits to your account. Plus, they both have no annual fee.3 Making diapers more affordable is as simple as using your card to make purchases you were already planning to make!
3. Take Child Tax Credits into account
The American Rescue Plan made changes to the enhanced child tax credit for 2021, and it’s important to take these funds into account when budgeting out the month. Eligible parents can expect:
- $300 per month per child under the age of 6.
- $250 per month per child between the ages of 6 and 17.
Check out our recent blog post for more information on eligibility. Or, visit the IRS website for payment dates. Use their child tax credit portal to view payments and enroll in advanced payments. Lastly, be sure to turn on notifications in Online Banking or the GECU mobile app so you know when the funds are available.
Cincinnati families can use these funds for immediate childcare needs or stow them away for the future.
4. Find your tribe
Couples with no stay-at-home parent will need to consider the cost of childcare. In 2020, over half of surveyed families spent $10,000 on childcare.5 Once any parental leave is up at work, do you know how you’ll pay for these services?
Ask around to see if someone in your network can watch the baby a few days a week. This way, you won’t have to use expensive daycare services as much.
Another option is nanny sharing, which is when you and another family share the services of a nanny. This would make a nanny much more affordable than if you tried to hire one solo.
5. Look to the future
As the saying goes, kids grow up too fast. While it’s strange to think about now, your tiny baby will one day be going to high school or even college. Education can be expensive, so start saving now with a 529 plan! These tax-advantaged savings vehicles are a popular way to save for college or K-12 tuition.
Becoming a parent is an exciting time, but it’s understandable if you have some money concerns. Take a deep breath – you’ve got this! GECU wants to help you open doors at every stage of life. Turn to us for secure savings accounts, robust checking account features, and industry-leading budgeting tools. We take the guess work out of banking so you can focus on family.