Once you get accustomed to being a new parent, you may find yourself picturing life with another adorable addition to your family. If you're planning to have your second child, you're in luck — some things are easier the next time around. For many parents, preparing financially for a baby is easier when you've already done it once. You know what to expect this time, and you may still have some baby items that you can reuse for baby number two.
By preparing ahead of time and taking steps to get your finances in order now, you can make your budget work for the addition of your new baby.
How to Prepare for Baby Number 2
Though much more goes into the choice to have a second child than finances and numbers, knowing how to prepare financially can give you peace of mind and reassure you and your partner that you know what to expect financially when you grow your family.
1. Know Your Existing Budget
The first step in knowing how to prepare for a baby on a budget is understanding your existing budget. Since the days you were expecting your first child, your budget has probably changed. Some costs may have gone up, while others may have dropped. Now is the time to add in your new, anticipated expenses, such as:
- Baby clothes
Utility and grocery costs, in particular, can increase with the addition of a new family member. Grocery items like formula can quickly increase your monthly grocery bill and may continue to grow when your second child switches to solid food. Similarly, growing your family could mean a higher utility bill. You may be doing laundry more frequently and running more heat or air conditioning due to spending more time indoors.
Next, assess your current income and expenses. If you aren't already tracking your expenses, it's time to start. Once you compare the money coming in and the money going out, you may want to reduce your spending in certain categories to make room in your budget for the additional costs of a second child, such as your travel and restaurant spending.
Additionally, you may want to prioritize debt payoff, especially if you notice your budget will be tight with a second child due to your current debt repayment obligations. A great place to start is cutting down your credit card debt, especially because credit cards tend to have higher interest rates.
2. Plan to Save Up
Like paying off debt before baby arrives, you may want to prioritize savings goals. This may include saving an emergency fund, saving up for a new vehicle or home, and saving for larger baby-related expenses. Here are some strategies:
- Save an emergency fund: If you don't already have an emergency fund, now is a great time to start saving one. If you have an emergency fund, you may want to assess whether you need to save more. A good rule of thumb is to save enough to cover several months or even a year's worth of expenses. An emergency fund can allow you to continue paying your monthly bills if you are suddenly unemployed and cover large, unexpected expenses, such as a hospital bill.
- Assess your home and vehicle: Are your current home and vehicle able to accommodate a larger family? Consider whether you want a home with more bedrooms or a vehicle with more seats. If you wish to purchase a new home or vehicle, you may want to start saving a down payment.
- Save for major baby-related expenses: Even with insurance, you may have to shoulder some costs associated with the pregnancy and birth of your second child. You may also want to save up enough to cover your insurance deductibles so you don't have to worry about how you'll afford those bills after your child is born.
When your new baby arrives, you'll already have enough on your plate between adjusting to a new sleep schedule, buying diapers, and finding the right formula. The last thing you want to worry about on top of everything else is money. Saving now can make sure you don't have to struggle financially or stress about money when baby arrives.
3. Find Opportunities to Reuse
Finding opportunities to reuse your first child's baby items can be a great way to make your budget work if you want a second child. As long as the items are in good condition, you may want to consider reusing the following:
- Car seat
- High chair
- Baby monitor
- Baby clothes
- Changing table
You may also be able to continue using bottles and a breast pump, though this depends on the age and condition of the items. If you are concerned, you may be able to replace some old or malfunctioning parts so that they are safe and functional again.
After you take an inventory of everything you can reuse, start searching for the other items you need. Buying early, at a discount, and secondhand can result in significant savings. Prioritize clothes, diapers, and wipes over gadgets and toys. Though a baby shower may be less common for a second child, if your first has not yet outgrown their baby clothes and belongings, you may want to have a baby shower for your next child. Register for any items you still need that you would rather avoid purchasing yourself.
4. Explore Insurance Benefits
Before your second child is born, explore your insurance policies and benefits. Determine what your health insurance covers, such as the hospital stay, delivery, or subsequent care. You may want to switch providers after your baby is born if you believe your current policy is insufficient. Consider whether you want to opt for a higher premium or deductible as well. You may also want to review the benefits of your life and disability insurance policies. You should have enough coverage for the additional cost of your second child.
If you are still wondering whether you can afford another baby after taking these steps, turn to Atlas Credit.
How to Prepare for a Baby Financially With Atlas Credit
At Atlas Credit, we provide access to affordable credit. If you have an immediate need for credit and banks or credit cards have turned you down, we're here to help you. You can complete a simple loan application over the phone, online, or at one of our branch locations. We have a quick decision process, and we consider more than just your credit score. If you are approved for a loan, you could receive your money the same day.
We have a number of storefront locations throughout Oklahoma and Texas and a presence online to serve areas across the nation. If you're planning for a baby financially, apply for a loan today to access affordable credit through Atlas Credit.