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Budgeting tips for new parents

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 budgeting for a family as soon as possible. 
Here’s some budgeting tips for new parents and things to keep in mind.

Create or adjust your budget

Your spending and savings habits will probably need to adjust to accommodate your new needs as a parent. 

Review your current income and expenses 

You may have already been affected by some immediate changes—for example, you or your spouse may have taken time away from work before and after having a baby or adopting, which may have reduced your income for a period of time. 

You may also have medical bills from the birth of your child. 

Whatever you’re adjusting your budget for, it can be beneficial to track your monthly spending or regularly review the data from a budgeting or banking app to see where you’re spending money. 

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. It’s important to note that you don’t have to completely give up what you enjoy. 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. 

And then there are the less obvious ways of cutting spending. For instance, you may save money on some types of insurance like car or homeowners simply by shopping around. Of course, the main expenses for most people with young children are child care and housing—both of which can be difficult to solve simply by being frugal.

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 new expenses like doctor’s appointments, child care costs, or new school clothes and supplies.

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How to balance debt, saving, and investing

Balancing paying off debt, saving, and investing for your future can be tricky. Following this step-by-step guide can help you decide which of your accounts and priorities should come first.
1. “About the Children,” Adopt US Kids, 2. ”Planning for Adoption: Knowing the Costs and Resources,” Child Welfare Information Gateway: Children’s Bureau, 2022, 3. “Private Adoption vs. Agency Adoption,” Academy of Adoption and Assisted Reproduction Attorneys, June 28, 2022, 4. “Providing Adoptive Parents With Information About Adoptees and Their Birth Families,” Child Welfare Information Gateway: Children’s Bureau, August 2020, 5. ‘Considering Siblings in Permanency Planning,” Child Welfare Information Gateway,

This information is general in nature and provided for educational purposes only.

Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.