When you’re expecting an addition to the family, once the initial excitement—and maybe a little shock—wears off, you might start asking yourself, “Now how do we afford this?” You’ve already got bills to pay (and maybe student debt to boot), so you want to feel financially secure before bringing baby home. With some smart changes to your spending and a little help from technology, finding financial confidence can be a whole lot easier. Read on for our favorite tech-savvy tips for saving up for baby.
1. Automate your savings.
Hats off to your money skills: An impressive 74 percent of millennials are focused on building a nest egg for the future. If you’re one of them, keep up the good work with a savings plan that adapts to your new life. Check out NerdWallet’s calculator to estimate costs in baby’s first year and start budgeting now. Think about where you can cut spending in anticipation of your future budget. Then set up weekly or monthly automatic deposits that reflect your future spending in order to boost your savings balance while you wait for baby.
Tech Tip: Stow that extra cash in an online savings account. As a digital bank, Ally Bank makes it easy to transfer funds and offers a more competitive rate than most brick-and-mortar banks to help grow your money fast. Motivate yourself by giving your account the name you plan to give your child—when you’re repeatedly reminded of what you’re saving for, you remain committed to the plan.
2. Put yourself on the payroll.
Parenthood might be the hardest job you’ll ever have. So why not pay yourself for working 24/7? Before baby is born, create a postdelivery budget that takes into account any paid leave you’re receiving from your employer (or a short-term disability insurance policy) and how much lost income you’ll need to set aside now to use during your time off.
Tech Tip: As soon as you find out you’re pregnant or going to adopt, stash your savings in a high-yield certificate of deposit account, which offers a higher rate of interest for a fixed term than typical savings accounts. The longer the term, generally the higher the rate.
3. Guesstimate your medical expenses.
If only doctors’ appointments and medical procedures came with clear price tags. Since they don’t, research the typical costs you’ll incur during your pregnancy and postpartum, as well as any for your baby. Then consult your insurance company’s website to determine what’s covered, what isn’t, and what’s free (for example, some offer free or low-cost breast pumps). Sign up for a flexible spending account or a health savings account to have pretax dollars automatically deducted from your paycheck to use toward these expenses.
Tech Tip: Use the debit card and online portal that’s connected to your FSA or HSA to track spending throughout your pregnancy and eliminate tedious, manual claims submissions.
4. Chip away at the cost of an extra set of hands.
Fact: Childcare could be more expensive than your mortgage. On average, it costs more than $10,000 a year to send an infant to day care, and just about a third of families spend 20 percent or more of their household income on childcare. To help offset this cost, consider enrolling in a dependent care flexible spending account before giving birth and set aside pretax money for day care, a nanny or babysitting (as long as you use the money during that calendar year).
Tech Tip: Once baby arrives, pay for childcare using an app or your bank’s transfer tool, which use an email address or mobile number to securely transfer funds. That way, there’s a handy electronic record when it comes time to file a claim.
5. Reward yourself.
When you have a newborn, you’re probably not going to cash in all those credit card rewards on a trip to the Great Wall of China. (Not for a few years, at least.) So why not redeem some of those stockpiled points for cash back or gift cards that can be used to purchase baby supplies? Right before baby comes is the perfect time to cash in and pick up anything you didn’t get from your registry. Many stores offer 10 to 15 percent off products you purchase after your baby shower or birth.
Tech Tip: If you do need to buy any last-minute items for the nursery or off your registry out of your own pocket, purchase them online using a browser extension or app that earns you cash back, like Ebates.
6. Set financial boundaries.
It can be super tempting to make your new arrival as Insta-ready as your morning matcha or your #OOTD. But it’s wise to limit how much and what you purchase for the nursery; babies don’t need the fanciest furniture or countless crib sheets. Same goes for that tiny newborn clothing. You’ll just end up replacing your infant’s wardrobe a couple of weeks postbirth anyway (read: babies grow fast).
Tech Tip: Don’t overspend on costly tech gadgets that may not be worth the extra dough. An audio monitor works just as well as the HD video upgrade and an automated formula maker doesn’t really save much time.
Disclaimer: Consider consulting a financial professional before making any major money decisions.
Tell us what you think about what you just read! Click here to take a survey and be entered to win a $100 Amazon gift card.
The Bump and Ally present We’re in This, Together—a sponsored content series featuring smart money-saving tips and advice to help achieve your future goals, including saving up for baby. Learn how Ally’s digital financial services can help you do it right.