Little boys are made of snips and snails and puppy dog tails while little girls are made of sugar and spice and everything nice. Most people have heard those old rhymes many times. If only it were that simple! While bringing home the new baby is a special time, it can also lead to emotional spending and expensive choices.
Marketers are aware of a new parent’s state of mind and do everything possible to feed those emotions by enticing them to spend, spend, spend. Today’s baby product industry pumps about $4 billion into our economy, providing a variety of necessities and luxuries for those bouncing baby boys and bubbly baby girls. When making plans for that new arrival, most families spend much more than originally planned because those little pink or blue products are just too cute to pass up.
Following are a few suggestions for new parents and grandparents to consider before lavishing the latest family addition with the latest cute products that significantly add to the cost of raising a child.
- Make a budget. Studies show that families spend an average of $6,000 preparing for baby’s arrival on top of the hospital bill. However, families can certainly spend much less by being creative and cost-conscious. For example, instead of buying coordinated sets of linens and crib sets, buy items separately. Complete sets often include things such as pillows and pillow cases that cannot be used by an infant. Eliminating unnecessary purchases will allow you to build in a few splurges, just in case there is something you can’t resist!
- Focus on the basics. While it’s tempting to buy all the latest gadgets, gizmos and designer brands, your baby will be just as happy with the basics from discount stores. Baby clothes may be the cutest thing in the store, but babies grow rather quickly and only wear those newborn onesies for a short period of time.
- Borrow items. Check with friends and families about what they have available. Many baby items have limited use and can easily be borrowed for the short period of time you need them. The same is true for maternity clothes. Friends and families may be glad to pass them along instead of storing them in the garage.
- Shop second-hand and consignment stores. Having new is not always necessary. Shopping second-hand stores and consignment shops for strollers, furniture, baby clothes, maternity clothes and other items can save a lot of money. However, be sure to research potential unsafe products such as strollers for possible recalls. Taking your items to similar stores once your baby has outgrown them is also a great way to generate income for future purchases. Keep in mind that experts recommend never buying a car seat or crib second-hand.
- Use cloth diapers. Believe it or not, paying for a diaper service is generally less expensive than buying all disposable diapers. The same is true for using washcloths instead of paper towels when cleaning up your baby’s messes.
- Keep receipts. Because emotions run high when shopping for babies, you may purchase items on a whim, things that really are not needed once you come home from the hospital. Keeping tags on products and storing receipts in one place makes it easier to make returns and get full refunds.
- Establish a college savings fund. Encourage friends and family members to make contributions to your child’s future instead of buying more things that you and your little one may or may not need. Be sure to keep the college fund in your name, however; money put into an account in a child’s name can reduce their eligibility for some scholarships, loans and grants. Plans like the 529 College Savings Accounts are good options because the funds remain in the name of the person who opened the account and, in Oklahoma, contributions to the Oklahoma College Savings plan are tax deductible.
- Remember your retirement fund. Because parents often get wrapped up in the excitement of a new baby and their child’s future, they may need to be reminded to take care of their own future needs. Saving for a child’s college education is important—but not as important as saving for retirement. College students have more options available to pay for their education than parents who want to retire.
Basically, children need to be clothed and fed. They need a place to sleep and a safe environment. And most importantly, they need your love and attention. That’s priceless.
Sue Lynn Sasser, PhD, is an associate professor of economics at the University of Central Oklahoma.