Practical advice.. How do you prepare financially to welcome your first child?

Dealing with this phase requires a balanced approach that focuses on advance preparation and rearranging priorities, as developing a solid spending plan and seeking economic solutions to provide basic needs reduces financial burdens without compromising the child’s quality of life. Giving up unnecessary luxuries also gives the family more physical space to deal with new needs.

In addition, families can benefit from social support and programs for new families to help ease the burden. Whether it’s helping extended family or taking advantage of government and community benefits, it becomes possible to balance financial obligations with the joy that accompanies this new chapter, allowing more focus to be made on creating beautiful memories with the new baby.

Financial responsibilities

The Forbes report, reviewed by Ektisad Sky News Arabia, indicates that having a child is an experience full of joy and transformation, but it entails great financial responsibilities that require careful planning. The report shared advice from first-time parents of a 15-month-old who revealed how quickly expenses can add up and how important it is to budget to ease financial pressures.

Basic costs include diapers and baby equipment, as well as running costs, e.g Caring for children And medical expenses.

While budgeting helps with financial stability by developing clear strategies for managing expenses and identifying opportunities for savings, the report discusses budgeting strategies for new parents, which can be summarized as follows:

• Track income and expenses using apps or spreadsheets to identify areas to cut spending and redistribute funds according to your child’s needs.
• Aim to save 6 months of expenses to meet unexpected events, reducing the need to borrow.
• Focus your spending on essentials like a safe bed and car seat, and take advantage of gifts or used collectibles to save money.
• Breastfeeding (if possible): Breastfeeding offers health and financial advantages compared to formula feeding, with alternatives considered when appropriate.
• Review your insurance options to include necessary medical coverage and consider health savings accounts to keep costs down.
• Talk to your partner and employers about parental leave plans and care costs to promote joint planning and strengthen financial stability.
• Consider saving for a child’s education while continuing to save for retirement and updating wills to include custody arrangements.

Significant budget adjustments

For his part, economic expert Yassin Ahmed, in exclusive statements to the “Ektisad Sky News Arabia” website, emphasized the importance of good financial planning for families who have a baby, noting that the presence of a child in the family requires essential adjustments to the family budget and setting priorities to avoid financial crisis.

He reviewed some important tips in this context as follows:

• It is necessary to prepare a monthly budget that takes into account new expenses related to the child, such as diapers, food, clothes and health care, while dividing the income between basic needs, child expenses and savings to ensure a sustainable financial balance. .
• Following a conscious savings policy can help reduce financial pressures. Among these strategies are (buying baby supplies in bulk to get more savings, swapping some new purchases for used ones in good condition, such as toys, and taking advantage of deals and discounts on baby supplies.
• Thinking about the future by planning the costs of early education and investing or saving to achieve these goals, while reviewing the family’s financial goals and ensuring their compatibility with the new situation after the arrival of the child.

Ahmed warned of a number of common mistakes parents make, including:

• Overconsumption: Being influenced by advertisements and marketing campaigns to buy expensive or unnecessary products.
• Don’t save for emergencies: Neglecting to set aside an amount for emergencies can expose a family to financial pressure in times of crisis.
• Excessive debt: Unwise use of loans or credit cards, leading to the accumulation of debt without a clear repayment plan.

Yassin Ahmed concluded his advice by encouraging new parents to focus on managing their resources wisely and stay away from social pressures that could make them spend recklessly, stressing that good planning is the key to achieving financial stability that reflects positively on the family and a child. welfare.

Increased costs

In a related context, a report by US News, reviewed by the website Sky News Arabia, indicates that raising children requires major financial adjustments for parents, as costs include buying gifts, paying school fees and university education costs.

While a later college education is one of the biggest expenses, other expenses such as medical bills, summer camps, and even future wedding expenses can be financially stressful. In order to ensure a stable financial future for children, experts advise to start saving early in accordance with specific financial goals.

Among the savings options for children is opening a savings account for them, as some banks allow the opening of savings accounts for children in partnership with their parents, which helps them to get into the habit of saving instead of spending. Parents can periodically transfer child benefit into this account to improve early money management. When children reach their teenage years, the accounts can be upgraded to debit card checking accounts under parental supervision.

Economic advice

In his statements to the Ektisad Sky News Arabia website, the director of the Roya Center for Studies, Bilal Shuaib, focused on a set of economic advice for individuals, especially parents, in light of global economic challenges, such as rising prices, slowing economic growth, and high interest rates.

• Do not leave work until an alternative opportunity is secured: We encourage parents not to make the decision to leave work until another job is secured, given the difficulty of finding new job opportunities in the midst of an economic recession.
• Manage your money wisely: Don’t buy everything you want. With the decline in purchasing power and the rise in prices, it is advised to focus on priorities and buy only necessities, while reducing spending on luxuries.
• Divide your income into three parts (spending, saving and investing).
• Early investment in children’s education: It is necessary to spend on children’s education as a long-term investment. It is important to take care to move towards education related to technology and artificial intelligence, because they represent the future of the global economy.
• Savings for children: It is important to set aside a small daily amount and save it for the child over the years, while directing them to invest these savings in an investment fund such as a small project to avoid their value declining over time.
• Teaching children concepts such as saving, investing and managing money from an early age helps build their economic awareness which enables them to make wise financial decisions in the future.

These tips aim to enable families to withstand economic challenges and secure a stable future for children, with an emphasis on careful financial planning and education as key pillars.