This post is sponsored by ScholarShare 529 College Savings Plan, a smart way to start saving for your little one’s college education.
Having a baby is an exciting milestone for sure, but it’s also an expensive one! If you feel overwhelmed when you think about things like the cost of diapers (let alone a college tuition), you’re not alone. Luckily there are smart steps you can take from the minute you find out you’re expecting, that can make even saving for college easy. Check out our list of tips below, to take you all the way from diapers to diploma…
Make a Monthly Budget
Maybe you’re already a pro when it comes to sticking to a strict monthly budget. But even if you’ve never had to make a budget in the past, you’re about to see a sizeable increase in your cost of living. So with that in mind, it’s wise to estimate how much your new baby-related expenses will cost you, and make a plan to change your spending accordingly. Consider costs like diapers, childcare (or the loss of one parent’s income if they plan to stay home with the baby), clothing, feeding, and adding a child to your health insurance plan. Budgeting basics still apply, meaning that you should aim to spend:
- 50% for needs such as household bills
- 30% for discretionary spending
- 20% for savings
As for your savings, this category previously included things like an emergency fund and retirement savings, but you will now want to add a line item for your child’s college tuition.
Borrow Instead of Buy
When it comes to big, one-time purchases like baby gear or clothes, borrow from friends and family whenever you can. It’s tempting to buy everything new, but keep in mind that you will only use things like a bassinet, or bouncer for 6 months tops, so there’s really no need to splurge on a fancy one all for yourself. If you do buy new gear, plan to sell it at a consignment shop or online marketplace (like Facebook or Craigslist) afterward to make some of your money back. You can take the money you saved on gear and invest it into more important things like a ScholarShare 529 College Savings Plan.
Start Saving for College Now
College tuition will likely be the single biggest expense in raising a child, so it really pays to be smart and start saving for college from day one (or even as early as pregnancy). Especially if you already have all the baby gear you need, you can encourage family and friends to contribute to a ScholarShare 529 College Savings Plan for your baby shower, your child’s birthdays, and holidays. The benefit of opening a ScholarShare 529 account in particular is that it gives you 100 percent tax-free growth. That could mean up to 25 percent more money for college compared to saving in a taxable account. So, whether your kiddo is headed to an Ivy League university or a culinary academy, ScholarShare 529 is a smart, tax-advantaged way to save for their future.
When it comes to contributing to your child’s ScholarShare 529 account, know that any savings are better than none at all. Say you can only afford to put away $100 per month; that’s $1,200 a year, which is way better than nothing. If your budget is stretched thin right now, know that you can save more aggressively once your children are out of diapers, in school, and your childcare costs go down.
Do you feel more confident about budgeting for baby?
We hope these tips helped! If we can impart one main word of advice, it’s to open up that ScholarShare 529 College Savings Plan, and start contributing to it early on.
XO Team LC
This post was proudly sponsored by…
Photos: Jessi Burrone for LaurenConrad.com
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