Whether you're adopting or expecting, your expenses will most likely increase after you become a parent. It's a good idea to start thinking about your budget as soon as possible. This means allocating time towards financial planning and budgeting.
Create or adjust your budget
Your spending and savings habits will probably need to adjust to accommodate your new needs as a parent. Some key budgeting tips to help new parents:
Review your current income and expenses
It's a good idea to review your monthly income and total expenses - then create a budget. It can be beneficial to track your monthly spending or take advantage of budgeting tools and apps to monitor your spending. Your budget may include cost for medical bills from the birth of your child, other healthcare cost, childcare, and ongoing expenses. It's also a good idea to either review or build an emergency savings (Fidelity recommends saving 3 to 6 months' worth of essential basic living expenses).
To learn more about emergency savings, read Fidelity's: Guide to emergency savings
Adjust your spending
After tracking your spending, it may be necessary to cut down on some expenses. The first place to look is often discretionary things like eating out, entertainment, and travel. However, having a plan and decreasing some expenses can help you enjoy the things you love while staying on top of your cash flow needs. You could also look for ways to save money on some types of insurance like car or homeowners simply by shopping around. It could be a good idea to also review your health and life insurance to fit the needs of your family.
Consider second-hand items
Second-hand items can be a great way to save, especially as your child is rapidly growing — newborn, infancy, toddler, and beyond. Consider double checking to be sure it's coming from a reliable or trusted source. Some online platforms allow buying and selling locally and beyond. Take note of items you'd be willing to sacrifice, and use second-hand instead of brand new.
Shop around
Not only could it be worthwhile to shop around for insurance options, but for clothing, household items, and other necessities for you and your family. Comparison sites could offer a way to find deals, help with savings, and buy smart.
Reevaluate your budget periodically
As your family continues to grow, your expenses will likely increase as well. It's a good idea to review your budget periodically so you can save for all of your expenses.