For many first-time parents, the joy of finding out a baby is on the way is followed closely by the stress of figuring out how pay for all the new stuff that baby will need. After all, those little love nuggets are expensive—the gear! The diapers! The college fund!—and if you wanted to, you could spend a small fortune on almost every item Baby needs. Plus, it's easy to buy more than you need, or buy the wrong things, if you just whip out your credit card and start spending. "You're almost guaranteed to waste money on things you don't need if you don't start thinking about them now," says Erica Sandberg, author of Expecting Money: The Essential Financial Plan for New and Growing Families.
Still, it's entirely possible to get what Baby needs and still stay on the right track financially by following a few simple steps:
Start saving right now.
Before you do anything else, open a brand new savings account and label it 'Baby' right this very second. "I implore all new families to set money aside for emergencies and extra expenses," says Sandberg. Plus, the longer you have to save up for new baby expenses, the less guilt you'll feel when the time comes to actually make those purchases, and the less likely you'll be to go into debt putting them on a credit card you don't have the cash to pay off. (Set yourself up with a savings account that accrues interest for an added savings bonus.)
Assess your lifestyle and make a list accordingly.
If you're totally honest with yourself, there are probably a few things on your 'buy for baby' list that aren't necessary. Although you might envision running in the park with your newborn every day, wait and see how things go in the first few months before dishing out serious cash (as much as $1,200!) on a jogging stroller you might only use a handful of times,—or worse, not at all. The same can probably be said of your nursery. City dwellers with limited space, for example, might skip the plush nursing chair with oversize ottoman and opt for a simple rocking chair with a comfy cushion instead. "This is so important," says Sandberg. "Go ahead and check out all the pre-prepared lists, but then start scratching out items that don't make much sense to you." Taking some time to assess your current lifestyle and cull your baby list accordingly could save you hundreds in the long run. If it turns out you really do want to run with your kid in the park you can always invest in a jogging stroller later.
Be smart about your registry.
Your friends and family will want to help you get started on the right foot, and setting up an expert registry is a great way to help them do that. Try visiting the store with a friend who has kids and who can explain to you what products she found helpful in her Mom life, and those she could have skipped. Be sure to "add those things that you're having trouble affording but will make your life easier and more pleasant," says Sandberg. Remember to be respectful, too, and include some cheaper items for those gifting on a budget. Insider tip: Skip registering for baby clothes—people are bound to buy you tons of cute onesies anyway.
Set a budget for the rest—and stick to it.
Before buying anything yourself, sit down and do the math to decide how much you can actually afford to purchase, and when. "It's essential to know how much money you have to work with on a monthly basis, as well as how much money is going out," says Sandberg. Hopefully by the time Baby arrives you'll have some money in savings, and it's likely a large percentage of what you need will have already been purchased from your registry. With whatever's left, determine if you have enough in the budget and in savings to purchase what you need outright. If not, get the essentials first (diapers, wipes, whatever the baby will be sleeping in the first few months, etc.) and work the rest into your monthly budget moving forward. Remember: Baby doesn't need everything right away!
Use a credit card with rewards.
If your current credit card isn't cutting it in the rewards department, apply for a new one that offers good cash back or reward incentives. "This is always a smart idea," Sandberg said. "If you can manage to use your credit cards and pay them in full every month, you'll never be charged interest—but the issuer will pay you [in rewards]." This is an especially smart plan if you end up funding big-ticket items—like a crib, car seat, or a stroller—yourself.
Research what you can buy used.
After you've created your culled list of items for Baby and your registry has been picked over, remember that you don't necessarily need to buy everything else brand new. You can save money by borrowing some things from friends and family or picking up items from places like Nextdoor (where people in your area might post items they're giving away) or Craigslist. Just be sure to know which items are okay to get used and which ones you should always buy new.
Ignore what everyone else has.
This might be the most difficult step, but it'll make a world of difference if you can follow it. "One of the worst things you can do is look around and compare what you have to what other parents have, then try to keep up," says Sandberg. "You'll never regret not buying that $200 crib mobile, and you'll always be grateful for the cash you've socked away, or the debt you don't have. There is no better time than now to prioritize your spending and saving."