We have been looking at strategies which couples can use to manage their money as their relationships develop through courtship, engagement and marriage. Let’s look at some of the financial considerations that couples may face when a new baby comes into the picture.

Save for medical expenses

An increase in medical expenses is an unavoidable reality when planning for children. From the pregnancy test that confirms that the little one is being formed, to the hospital bill after the bundle of joy enters the world, couples should expect to spend a lot of extra money on health costs.

Even if couples are not ready to start adding to their family, it would be wise to create a ‘baby account’ in which they put aside some funds every month. This nest egg would be a significant help in dealing with prenatal expenses when they finally make the decision to have children.

It would also be advisable for couples to secure health insurance at least a year in advance of the time in which they hope to start producing babies. There is usually a waiting period for health insurance to cover the medical expenses related to pregnancy and delivery.

Avoid overspending on baby items

Once the verdict is in and it’s confirmed that a baby is on the way, it’s natural for first-time parents to get excited about the addition to the family. Baby clothes, furniture and accessories can be adorable, and couples may often channel too much money into buying these items.

One option for couples to obtain some of the big-ticket baby necessities such as a car seat or crib is to create a baby registry. However, if they know that family and friends will be hard-pressed to pay the full cost of these items, they could set up an account to receive cash gifts instead.

When buying clothes for a new baby, it’s best to get bigger sizes than the infant currently needs. Babies develop rapidly and outgrow their clothes very quickly. Don’t opt for expensive brand-name items if money is tight; get lots of sturdy, low-cost clothes as babies need to be changed often.

Re-evaluate household expenses

After the new addition arrives, parents should be prepared to be faced with even more bills, as babies can be very expensive! From doctor’s visits to diapers, the costs related to maintaining a newborn can demolish even the most carefully planned household budget.

It might be difficult for new parents to identify all the possible expenses that will arise at this time, as they may not have prior experience about what it takes to care for a baby. They should try to be flexible with their spending, leaving room for unexpected costs to crop up at any time.

Parents may need to cut back on discretionary expenses, such as entertainment or personal care, which they may have comfortably afforded prior to the baby’s arrival. This will allow more wiggle room in the budget to deal with all the extra children’s bills in the first few years.

Start planning for education

While caring for a new baby may put severe pressure on the budget, new parents should be aware that their expenses will only continue to mount as the child gets older. Before long, they will have to start thinking about paying for pre-school and sometimes expensive preparatory school tuition.

Planning is essential for all well-thinking parents who want to provide the best education for their children. A school expenses calculator is available at financiallysmart.org, which can help parents to work out all these costs and know how much to put aside each month to meet these bills.

Additional financial sacrifices may have to be made by parents to ensure that their children can afford higher education in the future. The good news is that if they start saving and investing in a college fund as soon as the baby is born, then it will be less of a financial burden on their pockets when the time comes.

Look at creating extra income

When you factor in the cost of clothing, books, extra-curricular activities, birthday parties, presents, trips and the long list of must-have gadgets and toys that kids always seem to desire, some couples might be forgiven for questioning their sanity in wanting to have children in the first place!

Despite being tiny budget-busters, children are blessings who can bring joy and unity to their parents. When faced with the reality of rising costs, parents can use their shared desire of providing a better life for their children as a motivation to overcome their financial challenges.

Parents should look at ways to work together to generate extra income to meet their needs and achieve their goals. One option is to provide services on freelance websites such as freelancer.com, upwork.com or fiverr.com, which can be done after work or during the weekends.

Children can inspire their parents to do more and work harder than they would for their own needs. Once there is a willingness to seek solutions to any challenges that arise, parents may find that their children have enabled them to attain heights that they never even imagined for themselves.

Copyright © 2015 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, June 25, 2015.

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Cherryl is a money coach and business mentor, and founder of Financially S.M.A.R.T. Services. See more of her work at www.entrepreneursinjamaica.com and www.financiallysmart.org. Contact Cherryl