First-Time Dads: Here’s how to Budget for Baby

First-Time Dads_ Budgeting for Baby

Father’s Day is a time to recognize Dad and everything he has done for you, and it’s an especially important day for new fathers celebrating with their infants for the very first time.

Becoming a parent is such an exciting time that the total cost of being a dad may not have crossed your mind prior to baby’s arrival. Although no one can truly anticipate how much they’ll need to raise a child, a new Kanetix/RateSupermarket Father’s Day Twitter poll finds that the majority of expecting parents believe they will spend between $10,000 and $13,000 on their child’s first year of life. In fact, parents will shell out approximately $8,000 during the first year and an average of $12,825 per year until the child becomes independent, according to statistics from BMO.

Fortunately, there are a number of ways you can cut that figure back by as much as $4,500 per year – making it easier on your bank account and ultimately helping you save throughout the course of your child-rearing years.

Plan Ahead – How Much Does it Cost to Have a Baby

While it may not be the first thing on your mind after hearing the pregnancy news, you do need to take a few days to process the financial reality of your new situation. Then sit down and make a plan. What will you need in the first year? What adjustments need to be made in your home to prepare for the baby? Can you stay in the same home or should you look for something bigger or more “baby-proof”? Once you list your priorities, open a spreadsheet and research the cost of each, rounding up just to give your budget more wiggle room. Figure out what personal lifestyle concessions you may have to make to support the child, if any. Whether you’re a two-parent family or a single dad, the more you do your research ahead of time, the better off you’ll be.

Start saving ASAP!

As soon as you hear those words “I’m pregnant,” start putting money into a savings account. Setting aside a portion of each paycheque is a great start, as well as any extra cash that comes in – such as tax returns or HST rebates. Find small areas in your life where you can make cuts easily and immediately. For example, switch to online banking to cut paper bill fees, cancel your newspaper subscription in favour of free online downloads, or make your own coffee instead of buying it on your way to work every morning. Perhaps it’s time to let go of regular cable and get Netflix. Little things like these will go a long way over time.

Brand New vs. Gently Used

Think about what must be purchased brand new versus what you can buy second hand. Big ticket items like strollers and car seats that will be used on a daily basis and sustain wear-and-tear are worth spending the extra dollar, especially since safety regulations can change quite often. The same goes for much of the baby’s essential furniture where safety is paramount. However, children typically triple their birth weight in the first year of life, so buying brand new designer duds can go to waste. You’ll find many of these same items in great shape at second hand stores, along with toys and books. Even better, ask close friends or family for hand-me-downs.

DIY what You Can

If you have the skill, consider making items on your own prior to the baby’s arrival. It’s the 21st century, so it’s rather cool if dad can knit a sweater or a blanket.  If you have carpentry skills, why not construct the baby dresser drawers yourself? Or you can grow your own vegetable garden and puree the fruits and veggies – this will save plenty once the baby starts to eat solid foods.

Sign up for a Rewards Credit Card

RateSupermarket can help find you the perfect card that matches your new life circumstances. Consider a card that will give you points for groceries and other household items. Another great tip is to take advantage of your favourite retailer’s points card. A President’s Choice Financial Mastercard earns you 10 PC Points for every dollar you spend, while the Scotiabank GM Visa Card can help you put money away towards the purchase or lease of a GM vehicle – something that meets your needs if you need to upgrade your ride. In addition, many retailers offer solid points programs either in connection with credit cards. Hudson’s Bay and Canadian Tire credit and points cards are very popular, while signing up for cards that offer Petro-Points or Esso Extra points can save you money on gas while shuttling baby back and forth to first-year appointments.

Open an RESP and Budget for Baby

It’s never too soon to start investing in your baby’s future, and the federal government offers several programs to help you with that process. Your best bet is to open a Registered Education Savings Plan as soon as he or she is born and make deposits regularly. If you’re having a baby shower, consider asking friends and family to contribute to the RESP instead of buying baby gifts.

Don’t Skimp Unnecessarily!

Whatever you do, don’t risk quality for the sake of saving a few dollars here and there. This can end up costing you more in the long run, especially if you have to keep replacing inexpensive items. Spend the big bucks where you should and save on the rest. It’s about making better money decisions – not just cutting costs – especially when it comes to the newest member of your family. Use these money-saving tips to make the most out of your brand new relationship and help provide your bundle of joy with a bright future.

From all of us at RateSupermarket, happy Father’s Day!

Related Topics

Banking 101 / Lifestyle / Personal Finance / Saving for Education / Savings / Savings 101 / Your Budget

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