Money Tips for New College Graduates – Spending, Saving, & Budgeting Advice
What college student do you know that isn’t cheap? When you’re in school every penny counts and you learn to manage your money on a very tight budget. Saving money simply becomes second nature to you. I was so cheap in college I used to:
-Wear every last piece of clothing to delay paying for the laundry
-Ride my bike everywhere so I wouldn’t have to pay for gas
-Keep the heat turned as low as possible
-Eat breakfast in the dark to save on the electric bill
-Use water on my cereal so I wouldn’t have to buy milk
–Buy the cheapest beer possible, no matter the taste
-Eat the cheapest food possible, rice & beans almost every night
Any of those sound familiar? I’m sure you could give many more examples of ways students save money. The question is, now that you’re finished with school do you still have to live like a broke college student?
Making Money
Once you start your first job you may feel like you’re rolling in the dough. You go from making zero money to earning a regular income every payday. Although it may not be much, it’s a lot more money than you’re used to having. As my parents used to say, your money may be “burning a hole in your pocket”. You’ve been scraping by for years and now you may be eager to buy the things you’ve needed or wanted but couldn’t afford. Before you go out and blow your new income on a shopping spree think about the following story.
Starving for Money
A man is rescued from a desert island after four years of surviving on nothing but coconuts and fish. He’s taken to an all you can eat buffet and gorges himself on the food he’s dreamed about for the last 48 months. His body goes into shock at the massive amount of food he’s taken in. He becomes very ill, his bodily systems shut down, and he almost dies from the health repercussions.
See any parallel there between that guy and a new college graduate who finally earns money after 4 years of being broke and goes on a spending spree? Of course you won’t die from overspending but you can literally kill your financial future for years to come if you go on a buying binge.
One of the greatest assets you have as a recent college graduate for building your financial future is the value of compound growth over the next several decades. How you choose to spend, save, and budget your money now can determine whether you struggle with money for the rest of your life or have the financial freedom that many people only dream about.
Your Financial Future
If you’re a single adult earning a salary your options for building wealth are pretty promising. You don’t have to support anyone else. Your money doesn’t have to pay for diapers, engagement rings, or your spouse’s credit card bills. You don’t have to discuss with anyone how you’re going to spend your money or why.
Your money is all yours to do what you wish, just don’t blow it. You likely won’t always have this kind of financial freedom so spend your money wisely now. Here are some tips on how you can maximize the amount of money you keep in your pocket.
Avoid buying that brand new, flashy car. If you believe it is a good investment, realize that just driving it off the car lot decreases it’s value tremendously. Additionally, use an auto loan calculator to show you just how much you are paying for the car with interest included.
Avoid expensive rent. Do you need to live downtown in that luxury apartment? The fact is, that’s cash you are spending that you may not need to. Look for a lower end apartment that fits your needs and pocket the rest of your money.
Do think about cheap real estate options. With the real estate market so affordable right now, chances are good you’ll be well on your way to making a sizable investment long term if you buy now.
Look for a roommate. Sharing the expenses of owning a home or renting an apartment is a great way to save plenty of money.
Avoid credit card debt. While credit cards can be a good financial tool if used properly, they can also get you into a lot of trouble financially if you abuse them. In a later article we’ll cover some of the best credit cards for college graduates.
Managing Your Money
In addition to saving money on your biggest expenses like cars and rent and avoiding credit card bills, there are a few other key points to managing your money. You’ll want to simplify things by following a system to plan and track your spending. You’ll also want to protect yourself also unforeseen events with an emergency fund and insurance. Here are some details on these money tips:
Create a monthly budget and stick to it. Figure out how much you’d like to spend, how much you need to spend, then find a happy medium. Be realistic, don’t create a budget you won’t follow. Use your mobile device to record your spending and use software like Quicken, or even a simple spreadsheet, to track and analyze it. Watch out for things like eating out, bar tabs, and buying gadgets those add up faster than you realize.
Build an emergency fund available to you in an easy to access savings account. Use these funds instead of a credit card when you need money. Open an online savings account with ING Direct or Washington Mutual. Setup a direct deposit to start building up your fund right away.
Use online banking to stay on top of all of your balances and to know where your money is really being spent. You can download your transactions into your financial software to make tracking your spending easier.
Buy health insurance to protect you from catastrophic expenses and medical debt in the event of a major health issue. Make sure you have adequate auto insurance to cover your liability in the event of an accident.
College Graduate Finances
Leaving university for a job in the real world is a pretty exciting time. The money that comes with a job is nice after being a poor student for years. If you can combine the frugal tricks and habits you learned in college with the spending, saving, and budgeting tips we’ve covered you’ll be able to have fun with your newfound cash and still build a financial future for yourself.
For more financial advice for college graduates see the articles below:
Cut Your Health Care Costs By Understanding Your Insurance Coverage
Health insurance coverage can be a complex benefit to understand with the multitude of rules and restrictions that many insurance companies have in place. If you fail to follow your insurance plan’s guidelines, you may end up getting medical treatment that isn’t covered and having to pay more for health care.
One of the keys to avoiding situations where your doctor’s visits or prescription drugs aren’t covered is to familiarize yourself with your insurance plan’s Summary Plan Description (SPD). The Department of Labor describes the summary plan description as a
“document that tells participants what the plan provides and how it operates. It provides information on when an employee can begin to participate in the plan, how service and benefits are calculated, when benefits becomes vested, when and in what form benefits are paid, and how to file a claim for benefits.”
Ask your Human Resources department for a copy of your SPD, the Employee Retirement Income Security Act (ERISA) requires plan administrators to provide plan participants with this information. Understanding what your medical plan covers and the medical care options before going for health services will help you get the most out of your insurance.
Insurance Coverage Examples
Of course every plan is different but here are some examples of ways that I can save money by smart use of my insurance plan:
Lab Work and X-Rays
There are actually two ways lab work and/or an x-ray claim can be processed. Lab work and X-rays may be part of an office visit exam or performed in a hospital setting and billed as out-patient services. If it’s part of an office visit exam, they’re paid at 100%, subject to $25 co-pay. On the other hand, if it’s an outpatient services at an in-network hospital I may be subject to the $400 annual deductible first, and then responsible for a 10% coinsurance for any remaining balance due.
In this case, using independent in-network labs, such as Lab Corp, will help save me money. Independent lab charges are covered at 100%, subject to the provider’s office visit co-pay. Whereas labs affiliated with a hospital are covered under outpatient services which will cost me more.
Quitting Smoking
I’m not a smoker but I walk past co-workers every day out on their smoke breaks. Smoking is an expensive habit, not only because of the cost of cigarettes but also due to the associated health issues. I’ve never been through the process of trying to kick the habit but I know it’s not an easy task, and it’s not cheap.
What many people don’t know is that our medical plan provides for one prescribed full course of treatment for employees or a covered dependent. An example of a full course of treatment might be 12 weeks of the Patch along with Chantix and possibly an anti-depressant medication. All of these drugs are covered at 100% by our insurance plan when prescribed by a healthcare provider and submitted to a local in-network retail pharmacy.
$4 Generic Drugs
In some cases it may be cheaper to buy prescriptions directly rather than through our insurance plan. At some stores you can buy a 30-day supply of more than 300 generic drugs for $4 per prescription fill or refill. These can offer cost savings when comparing against the cost of the medical plan co-pay. Examples of stores offering discounted generic drugs are Wal-Mart, Sam’s Club, Target, Kroger, and HyVee.
For instance, in our plan a prescription for the diabetes drug called Metformin, a 30-day supply requires a $10.00 co-pay (Tier 1). However, using one of the pharmacies listed above, the co-pay for this generic drug would be $4.00, a cost savings of $6.00.
Not only that, even if a pharmacy doesn’t participate in a formal program some stores, such as CVS Pharmacy, might match the $4 price if you request it. K-Mart also offers a 90-day fill for $15.00 on specific drugs.
Health Care Cost Summary
If you familiarize yourself with the ins and outs of your insurance plan, you can save money on your medical costs by making sure your health care is covered. Planning ahead takes time but it can definitely save you money. Here are some more tips on planning ahead to help avoid huge medical bills.
Economic Stimulus Rebate Checks – How to Track Your Stimulus Payment
The economic stimulus rebate checks are in the mail, have you gotten your rebate yet? If you’re not sure whether you’re getting any money, check out these economic stimulus check frequently asked questions.
If you meet the qualifications and want to know when you’re getting your rebate check, the IRS has put up a site called “Where’s my Stimulus Payment” that allows you to check on it’s progress. (Update: The IRS has also setup a rebate hotline so you can inquire by phone, 1-866-234-2942) In order to find out the status of your rebate on the website you’ll have to provide the following:
- Your Filing status
- Social Security Number
- Number of Exemptions on your 2007 tax return
It may not be much help, it wasn’t for me. I got the message “We are sorry. Specific information about your Stimulus payment is not available.” The possible reasons they gave for not having any status on the stimulus payment were:
– Your payment may still be coming, but has not yet been scheduled
– You did not file a tax return for 2007 or your return is still being processed
I know I filed for 2007 so I figured it must be that our payment hasn’t been scheduled yet. I checked out the stimulus payment schedule page and realized why they don’t have any information on our rebate yet.
“Stimulus Payments are being issued on a schedule according to the last 2 digits of the primary social security number (SSN) shown on your 2007 tax return. …. Payments will be made by either direct deposit or paper check, consistent with how people filed their 2007 tax return.”
We paid our taxes via direct deposit so we should be on the fast track but my social security number doesn’t match the first set of criteria so we’ll have to wait a little longer:
| Last two SSN digits: | Payments will be transmitted no later than: |
| 00 – 20 | May 2 |
| 21 – 75 | May 9 |
| 76 – 99 | May 16 |
Unfortunately if you paid your taxes with a check, the stimulus payment schedule stretches out until July
| Last two SSN digits: | Payments will be transmitted no later than: |
| 00 – 09 | May 16 |
| 10 – 18 | May 23 |
| 19 – 25 | May 30 |
| 26 – 38 | June 6 |
| 39 – 51 | June 13 |
| 52 – 63 | June 20 |
| 64 – 75 | June 27 |
| 76 – 87 | July 4 |
| 88 – 99 | July 11 |
Avoiding Tax Scams
Spammers are trying to take advantage of the stimulus payment rush and sending out fake emails posing as requests for more information from the IRS. According to this tax scam article the emails look very authentic but if you follow the links they contain you’ll be taken to a mock IRS site.
Any information you enter there could be used for identity theft purposes so don’t click on any links in emails about the tax stimulus payments, instead type in irs.gov if you want to visit IRS site. If you do receive one of these fraudulent emails, you can forward it to phishing@irs.gov.
For more information on taxes, the best way to use your tax rebate, and personal finance tips be sure to take advantage of our free daily updates. You can have them delivered by email or in your feed reader. Don’t miss a tip, sign up today!
Student Loan Tips for New College Graduates
How are you ever going to pay off your student loans? Is your college debt going to follow you around for the rest of your life?
Investing in Your Future
Although it may seem daunting, if you approach your college loans as an investment rather than a burden it could help you get rid of your debt. If you think about it, you’re not much different than a business that borrowed thousands of dollars in startup money. You took out student loans to fund your professional training, now that you have the needed skills you can earn the money to pay back the debt. First we’ll take a look at making your payments while managing your cash flow.
Student Loan Consolidation
Many small businesses use a variety of funding sources when getting started such as credit cards, personal loans, and money borrowed from friends and family. Once they begin earning a steady income, one of the things they might do to lower payments and simplify the expense is to consolidate their debt into one payment.
Since college students in search of school money will also frequently use an assortment of funding sources, student loan consolidation may help simplify your college debt repayments. Consolidation can also reduce your monthly payments, for example you could go from owing $200 a month on three different loans to owing $200 on one. Obviously, you still have the same amount of debt and you’ll actually pay more interest over the long term. Another reason to consider loan consolidation is if you have loans at several different interest rates, you might be able to role them all into one loan with a better rate.
Lowering Your Payments
Of course, not all college graduates get a job right away, just like not all businesses are profitable right away. There may be a period of time after graduation when little or no money is coming in. Even though cash flow may be tight, you still have to pay back the money you borrowed. One thing you might look into is lengthening your student loan term, which should reduce your monthly payments. Of course this will actually increase the amount of interest you pay over the life of the loan but can help your cash flow in the short term.
Delaying Your Payments?
One advantage that college graduates in debt have over small businesses trying to pay back startup loans is that repayment rules are a little more flexible for students. If you haven’t landed a job yet and run into trouble making your monthly payments you can sometimes work with the lender to get a deferment, which allows you to hold off regular payments. If you don’t qualify for the defermentthere’s also something known as a forbearance which lets you temporarily postpone regular payments, typically for a shorter period of time than the deferment. Although these methods allow you to put off payments the interest on your loan will still be accruing.
Paying Off Your Loans
So far we’ve looked at cases where money is tight right out of school and you need help repaying your debt. If, on the other hand, you do find a job and have money you can put towards making extra payments on your student loan then go for it. The money you borrowed to go to school was an investment in your future earnings power. If you see the results of that investment right out of school and start paying down your loans then your break even point on the money you borrowed will come sooner.
Don’t be discouraged if you can’t afford to accelerate your loan payments, your degree should pay for itself eventually. Many students wouldn’t have been able to afford a college degree without borrowing money. You’re basically using leverage, borrowing money from the government at relatively low rates, to invest in an education. You then use those skills to earn a higher salary and pay off the money you owe over an extended period.
Student Loan Summary
You can use methods such as student loan consolidation, deferments, and forbearance to help manage the amount you pay for student loans as you’re getting on your feet. Once you have an established salary, paying down your loans will reduce the amount of total interest you pay and help pay off the debt faster.
For more financial coverage for college graduates here is information about health insurance and investing tips for people just out of school. Check back for the next article on spending and budgeting tips.
Less is More Edition – Personal Finance Review
Your world is full of information. Concise summaries save you time. Three words tell the stories of the money articles below:
Health Insurance for New College Graduates – Shopping Around for Affordable Coverage
Buying health insurance is probably the last thing a new college graduate wants to research as they deal with the multitude of changes that accompany their sudden leap into the real world.
Unfortunately, your change in status from student to regular person will also mean changes in your health insurance coverage. For the last several years you may have been on your parent’s insurance plan or covered by student insurance but after graduation, you are likely on your own. As a result many college graduates simply go without, which can be one of the worst decisions you can make for your health and your wallet.
College Graduate Health Insurance
Risks of Going Without Health Insurance
If you don’t have health insurance you’re more likely to avoid needed treatment or preventive care due to the costs involved. In the event you’re faced with major health issues that demand treatment you could find yourself deep in debt if you don’t have any type of catastrophic coverage. Even if health insurance seems like something you can’t afford right out of school it’s worth taking the time to research the options and see what form of coverage you can squeeze into your budget.
Employer Health Insurance
If you’ve landed a job, chances are you have some decent options for health insurance coverage. Group health insurance provided by many employers is often the most affordable type of insurance available to you. Unfortunately, the rising cost of insuring workers is causing some employers to reduce the benefits the plan offers or drop health benefits all together. You could be faced with increased deductibles, higher premiums, or both but it’s still often better than having to find insurance on your own.
Make an appointment with your human resources representative to make sure you understand and are taking advantage of the health benefits available to you. If you’re still looking for a job, make sure you take the benefits package into account as you’re weighing your options. A good health insurance plan, along with things like dental, disability, and life insurance can be worth a lot of money.
Short Term Insurance
If you don’t have a job yet or won’t be starting one for several months you may want to look into short term health insurance. You can often buy insurance a month at a time for up to 6–12 month terms. A quick quote from eHealthInsurance.com shows plans ranging from $30–$80 a month. In some cases if you pay up front you might be able lower the premiums.
This insurance coverage is designed as a safety net against enormous medical costs. It generally does not include physical checkups, prescription medication plans, or other types of preventative care needs. Short term insurance gives you coverage in the event of emergency situations or catastrophic events. The main point of buying this insurance is so that you don’t end up with huge medical bills if you end up in the hospital with some major health issue.
Long Term Insurance
If you don’t anticipate having a job for quite a while or your employer doesn’t offer health insurance than a more permanent plan may what you need. The good news is that unlike short term insurance, regular insurance plans will include things like preventative care, prescriptions, and sometimes even dental care. The bad news is that they are also more expensive. Journalist Steven Rosen found the following quotes when searching for insurance for college graduates:
“A healthy 22-year-old male nonsmoker, for example, would pay a premium of $113 a month for a Humana individual policy with a $2,500 deductible, a prescription drug benefit and dental coverage. Three other policies I checked — from Blue Cross and Blue Shield, Aetna and Coventry — had premiums in the range of $105 to $115 a month.”
Compare those prices to the short term insurance options and you’ll see they’re considerably higher. Of course one way to reduce the premiums is to go with a higher deductible. If that’s a new term for you, the deductible is the amount of money you will need to pay for covered health care needs before your insurance company starts putting money in. In general the higher your deductible, the lower your monthly payments.
Insurance Choices
As you can tell from the various options we’ve covered, the best insurance for a college graduate depends on your individual situation. Factors such as whether you have any employer provided insurance, the length of time you’ll be without insurance, any pre-existing medical conditions, and how high a deductible you’re willing to pay all go into picking the right coverage for you.
Of course, you always have the option of not getting any health insurance at all but just be aware of the risk you’re running should you run into medical complications. Chances are you already have some kind of school loans to pay off. Do you want to run the risk of incurring high medical bills to add even more debt to the amount you owe?
Your best bet is to research all of the available options and determine which one you can afford. I mentioned eHealthInsurance.com earlier, sites like those allow you to search and compare the various health insurance plans available and determine which is going to best fit with your overall lifestyle, budget, and needs.
College Graduate Finance Tips
Unfortunately buying health insurance isn’t the only financial decision you’ll have to make as you leave the college life. Check out this cheatsheet of financial tips for college graduates and learn a little more about topics such as investing advice for new college graduates.
Home Owners Insurance Can Offer Comfort During Tornados & Floods
Home owners insurance and flood insurance are a burden 99% of the time and a blessing the other 1%. Needless to say, I have a love/hate relationship with insurance. The majority of the time I’m not real pleased with it, watching the premiums come out of our paycheck every month. However, it’s those moments when you really need it that you’re thankful for those payments and appreciate the protection it provides.
As our family sat in the basement last night, listening to the wind roar and the tornado sirens screaming, I was in love with our home owners insurance. Although our son felt safe enough to fall asleep in my lap, my wife and I were definitely nervous as we heard the weather man tracking the storms approach to our part of town.
My initial thoughts were full of different contingency plans, where we should huddle, what big metal pipes we could hold onto, those kinds of things. As the storm went on and we sat there for a while my mind began to wander. I thought about how all that really mattered was that the three of us were safe. We could always start over in a new house if we had to, just as long as we were together. The comforting thing was I didn’t worry about how we’d pay for it because we have homeowners insurance.
I thought back to last spring when there was flooding in the Midwest and how worried I was that we didn’t have flood insurance. Although it really stinks paying premiums all year round, those nights in the basement hiding from tornados or those mornings hiking back to the river and watching it leave its banks are the times when you realize why it is you write that check each month.
Investing Advice for New College Graduates – The Secret to Decades of Growth
What investing advantage do you have that thousands of other people only dream about? As a recent college graduate this advantage puts you in a position where you could make thousands, or even hundreds of thousands of dollars, from investing over the course of your life.
The sad thing is that many people in your shoes ignore this advantage and squander away this opportunity until much later in life. Would you like to know what this enormous advantage is? If I tell you, do you promise to make use of it?
This advantage is no big secret. It’s one of those things that the older you get, the more you realize it’s benefits. The thing is, that by the time you really understand it’s value most people have already lost years of valuable time. Oops, I let it slip. Somewhere hidden in that last sentence is your huge advantage, can you guess what it is? Okay, I’ll say it again, this time there’ll be no mistaking it:
“TIME”
You have time on your side. Money you invest right now will have decades of compounded growth. As a recent college graduate you’ll probably enjoy the most financial flexibility you’ll have of any period in your life. Although you likely have student loans to contend with, you’re limited financial responsibilities will probably give you enough disposable income to get your investments rolling.
You’re fortunate because time is one of the most important ingredients in anyone’s investing forecast and you have a lot of it. The more time you have to save money, the more it can grow and that can mean significant returns on your investment for the future.
Investing Example
Assume you don’t start saving now, believing you have plenty of time later in life to save. You need a big chunk of money at age 50, and start saving at 40, so you have ten years to save. Let’s say you invest $100 a month for that 10 years earning a 6.5% return (here’s hoping that you do much more than this…) At 6.5 percent, with no initial deposit, in ten years time, you’ll have $16,840 in your savings account.
Now consider a different scenario, instead of waiting, you start investing now so you have 25 years worth of investment time. With the same $100 a month, no initial deposit and a 6.5 percent interest rate, you’ll have well over $75,800 in your account by the time you’re 50. Hopefully you’ll be saving more than $100 a month and be earning higher rate of return but you have to admit, the difference between $16,840 and $75,800 is pretty big.
Reasons to Start Investing Right Now
Pensions and Social Security won’t be there to help you. Social Security may not be around at all, and if it is, it likely won’t provide the amount of money you need to live on in retirement.
A 401k, especially one that has employee matching, is invested before taxes. Your invested income has years to grow and compound before taking a tax hit. Taken together with money contributed by employee matching programs, a 401k is one of the best ways to save for your future. You can tap into it later for your first down payment on a home or as a safety measure for hardships.
You can be more aggressive when you are younger. Since you have a longer time frame for your money to grow, you can afford higher risk investments that should yield higher returns. If they end up losing you money, there are still plenty of years to make up for the loss.
Investing Summary
The most important piece of investing advice I can give to new graduates is to start right away. The Internet has made enormous amounts of information available about the principles of investing and the different opportunities available. Take advantage of it and learn how to evaluate and choose where to invest your money.
Today’s investing technology allows almost anyone to start investing with minimal amounts of cash. You can open an IRA for as little as $250 if you setup up regular deposits with multiple mutual fund companies. You can even invest as little as $4 at a time in stocks through programs like ShareBuilder.
Take a piece of advice from thousands of people in older generations who wish they could turn back the clock and start saving and investing earlier in their life. Of course, hindsight is 20/20, but wishing something won’t make them any money. The good news is you don’t have to wish for the opportunity, it’s sitting right in front of you. Take advantage of it!
Financial Tips for New College Graduates – A Cheatsheet for Managing Your Money
Were you in class the day they handed out the financial tip sheet? You know, the one that covered how to buy insurance, invest your money, pay off your student loans, manage your credit cards, and budget out your new salary? I think most of us missed that day so here’s another copy you can use to make your money work for you.
They say it’s pretty easy for college students to manage money. When you’re in school, you’re usually so broke that there’s no money to manage! The thing about college is that everyone pretty much expects you to have no cash, to scrape by on a part time job and student loans.
Suddenly, after graduation society instantly wants you to become financially responsible:
- No more sleeping through class, now you have to get up and go to work.
- No more borrowing thousands of dollars a year, now you have to start paying back your student loans.
- No more student tax credits, now you’re earning real money and the government wants their cut.
These realities can be a rude awakening, some mornings you’ll think about adding another major and going back to school for a few more years, just to get away from all that responsibility.
Making Your Money Work for You
Of course, the good news is that now the money’s rolling in. You spent all those years learning a profession and now you’re hard work pays off each month when you get a paycheck. If you have to get up and go to work every day, why not make the money you earn go as far as it can?
This financial cheat sheet series can help you with that. We’ll cover some things you may not have picked up in school or maybe tips you already know but could use a refresher. The good news is that a lot of personal finance just boils down to understanding the key concepts and using common sense. Below are the topics we’ll take a look at, stay tuned for the financial coverage:
How Parents Can Save Money on Baby – Tips on Spending & Budgeting for Newborns
This advice is a guest post from a money smart mom.
Having a baby is one of the most precious times in your life. It can also be one of the scariest. Even though your baby is such a small person he or she can make a huge dent in your bank account. What can you do to budget for baby and save a bundle?
The first thing you need to do is realize that hardly anyone truly feels prepared to bring a baby into the world where finances are concerned. You can wander through the baby isles at even the most discounted of discount stores and still get sticker shock. The good news is that baby needs less than you think and there are ways for you to lower your costs all around.
Baby Gear That’s Worth the Money
There are a few things that you’ll need to work into your budget that it’s not a good idea to skimp on.
Car Seat
You should never buy a car seat second hand or even accept one for free from a friend. There are several reasons for this:
- You can’t be 100% sure the seat was never in an accident
- There are actually expiration dates on car seats
- They are being made with new technology all the time making them better and safer
With that being said you can still save money and save your budget. Keep an eye out for circulars in your mailbox and discount codes online because you can save money when stores hold sales. That way you’ll have the latest and safest car seat for your baby at a lower price.
Baby Crib
It’s not safe to use some of the older cribs, even if it’s a family heirloom that you love. Some of the slats on the cribs that were made years ago are not safe, and you can never be sure that the hardware will last. When you buy a new crib from the store you can still save money when you look for special sales.
You can also save by getting a simple crib without all of the bells and whistles. In fact, a great crib can be had for around $100! Keep in mind that you can get a convertible crib that will last with your child into his later toddler years. That can save you some money over getting a toddler bed. The choice is yours you just have to weigh the different options.
As long as you make sure you are following safety guidelines with the crib and car seat you can really start to have fun budgeting for the other “Stuff.” There are so many ways to cut down on the money you’ll spend.
Saving Money on Baby Purchases
The first place to start is in the nursery. While it might be a lot of fun and really cute to buy comforters and pillows for the nursery it is also very expensive. And while you want those kinds of things for your own bedroom your baby doesn’t need them! In fact, it is recommended that your baby’s crib be totally clear except for a mattress pad and fitted sheet. You’ve just cut your cost in half or more.
Changing Tables
Another way you can save money is by not buying a changing table. They might look cute and you might be really tempted if you can get this as part of a matching crib set, but they are hardly necessary.
In fact, many mothers and fathers fare just fine by changing their baby on a pad of the bed or even the floor. You can save hundreds by nixing the changing table. If you still want a specialized place for changing you can buy a Pack N’ Play with a changing attachment. These are a lot less expensive and serve a great purpose as a changing table, bassinet, and play yard. The more use you can get out of one item the better.
Diapers
Diapers can also be a burden on your wallet. You can get just as much use out of the budget brands as you can out of the big name brands. Another great thing to do is cloth diaper. You can just wash these diapers and reuse them for a huge cost savings. You’ll be doing something good for the environment as well!
Forumula
You can also consider the cost of formula. If it is possible for you, you might enjoy nursing your baby. This is free and better for the baby health-wise. If you are not able to nurse and are on a very limited baby budget you can look into the WIC program, which provides mothers with food for their babies. You can clip coupons and buy in bulk if you do not qualify for WIC.
Avoid Extras
There are also many products that are touted as “necessary” to parents that really are not necessary at all. Wipe warmers, crib bumpers, and other things might be something you want, but it’s not something your baby needs. Put your focus on those necessities because that is what your baby will love you for and benefit from.
Baby Saving Summary
You can truly cut corners without sacrificing anything that your baby needs. If you are still finding that money is tight you might want to sit down with your spouse or partner and think of other areas you can cut down on.
Budgeting for baby is not an easy thing but it can be done. If you take the time to build your budget and focus on your baby’s needs instead of what Babies R Us is trying to promote then you, your baby, and your wallet will be just fine.
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I'm Ben Edwards and I've been addicted to personal finance since I was 12 years old.
That passion for money has paid off for my family - so in 2006 I founded Money Smart Life to help you afford the life that you want. Read My Story...
