Tips for Staying on Budget With a New Baby - Baby Chick
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Staying on Budget With a New Baby

Learn how budgeting on paper, switching to cash at the store, and cutting out conveniences can help you save money when you have a new baby.

Updated March 16, 2024

by Meredith Rines

Accountant and Certified Financial Planner

After your new baby arrives, everything in your life seems to fall out of its routine. Let’s face it — most families’ budgets and spending habits take a nosedive when their baby is born. You’re tired, you probably haven’t showered in the past day (or two), and you’re in survival mode. Fortunately, there are a few things you can do to help keep your budget in check.

Tips for Staying on Budget With Your New Baby

Here are some tips to avoid going over your budget when you have a new baby:

1. Spend on Paper First

The best tip you can follow is to create a budget on paper or the computer before spending any money. Your budget doesn’t have to be complicated — simply write down your fixed expenses (mortgage, insurance, car payment, etc.), your variable expenses (eating out, groceries, entertainment, etc.), and your income. Then, make sure your expenses don’t exceed your income. If they do, spend less in a few areas of your budget to make up the difference. If you have any extra monthly income, take a closer look at your budget. Perhaps you can put the additional income into an emergency fund for those rainy days or for paying down debt.

Also, try to have your discretionary spending equal to zero after subtracting your expenses from your income. This way, you know that every dollar you earn has a specific purpose in your budget to help you reach your goals.

2. Switch To Cash

By not using your debit or credit cards, you take away the temptation to overspend. A good recommendation is to use the envelope system for areas of your budget where you tend to go over, such as groceries, eating out, entertainment, and clothing. So, if you find yourself overspending each month after your baby arrives, switch to using cash. You’ll see exactly how much you have left in a budget category by glancing at your cash envelope.

Using the cash envelope method is easy. Once you’ve created your budget and know how much you’ll spend for the next week, two weeks, or month in a particular category (like groceries), withdraw that amount from the bank. When you go to the grocery store, you can only spend the cash in your envelope.

How Does It Work?

Let’s say you budgeted $400 a month for groceries and get paid twice a month. When you receive your first paycheck, take out $200 from your bank account and meal plan for the next two weeks. Include any other household items you’ll need for the next two weeks on your grocery list — bath products, cleaning items, paper goods, etc. Put your $200 in an envelope marked “groceries.” When you go to the store, you can only spend from that specific envelope. And when you get your second paycheck for the month, you do it all over again.

Use your calculator on your phone when you go through the store. Add up the items you’re putting into your cart to ensure you don’t go over your budgeted amount. Always include a few extra dollars in your total to cover any sales tax. If you budgeted $200 and your total is $215, take a few items out to lower your bill.

If you have money left in your envelope at the end of the month, you can do a couple of different things. First, you can reward yourself. For example, spend the money on eating out one night or going to the movies. The second option is to save the money for a future month when you may need to spend more.

3. Cut out Anything That Isn’t Necessary

After your baby arrives, many of our expenses go toward convenience items. Things like an early morning coffee run because you’re exhausted, eating out at lunch and dinner because it’s easier, and so on. You may even be splurging on the top-of-the-line cable package from your pre-baby days.

Take a good, hard look at your daily and monthly spending habits to see if there are any areas you can reduce. You might be surprised at the savings from just switching a few habits. For example, if you start eating out a lot after the baby arrives, take a day to prepare a few freezer meals instead. Or if you do cook, double the recipe and freeze the extra. Preparing and freezing your meals is an excellent way to save money and have quick dinners without much effort.

Similarly, if you love your early morning coffee from the local cafe, try making it at home instead. You can save a lot of money by setting the timer on your coffee pot to start on its own each morning. Think about it . . . you might be spending close to $4 each morning on your favorite latte. At five days a week, 52 weeks a year, that’s over $1,000 a year you could be saving! If you budget $200 a month for eating out, your coffee habit is costing you close to $87 a month from your budget. That’s a lot!

The Bottom Line

These few tips can really help you save money after your baby arrives. More importantly, they can help you avoid going into debt. It’s hard once the baby is here. Time seems to go by so much faster, and you’re always exhausted. Convenience is key when you have a newborn at home. With simple planning, you can save yourself time and money.

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Meredith Rines, MBA, CFP®
Meredith Rines Accountant and Certified Financial Planner
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Wife, Mom, MBA, Certified Financial Planner, and a budget and financial strategist helping families pay off debt and live the life they've always wanted. Meredith resides in Missouri with her… Read more

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