2. Register early
Having a baby is exciting for everyone, including family and friends. And they'll be looking for ways to get involved or to help, which is why it's a good idea to set up a baby registry. Plus, friends, family and grandparents can come together to help buy those big-ticket items. And that will help you cut expenses even more.
3. Set up a baby fund
Not only do babies need a lot of stuff like diapers and formula, you'll be looking at car seats, furniture and even daycare expenses. So it's a good idea to start saving for all of it as early as possible. Create a separate bank account where you can start putting money away now. So, when the baby arrives, you'll be ready for the additional expenses.
And if you're a Bank of America customer, you can set up automatic transfers so you can start building up your baby fund with each paycheck.
4. Creating a budget
If you're wondering how to prepare for a baby financially, start thinking about your budget sooner rather than later. And remember, if one of you is thinking about staying home after baby is born, now's a good time to plan for what life will be like with one income. Look at your current budgets for discretionary income and savings, as the money for your new expenses will most likely come out of these pools of money.
Want help with putting a budget together? Bank of America's Budgeting Spreadsheet is a good place to start.
5. Create an education fund
It's never too soon to start saving for college. A 529 college savings plan, like ones offered by Merrill Edge, is a tax advantagedFootnote 1 investment account designed to help pay for future college costs. The sooner you can start putting money into that account, the more you'll potentially have available when it comes time for your baby to be an undergrad. This money can be invested and has the opportunity to grow over time, but be sure you also understand the risks that come with investingFootnote 2.
6. Purchase life insurance and create a will
Getting life insurance and creating a will are not only parts of smart financial planning, but they also provide much needed peace of mind. Should anything unexpected happen, you know there is a plan in place that protects and takes care of your family. Plus, this is also a good time to review your existing policies and update your beneficiaries, if needed.
When you're getting ready to have a baby, it's a fun and frantic time. But it's also the best time to start financially preparing for a baby. Put together a plan you feel comfortable with and know that if you need to, you can always adjust your budget later and still be in good shape.