10 smart financial moves for New and Expectant Parents

This doesn’t need much explanation. If you have significant personal debts, consider doing everything in your power to pay them down or at least reduce them. Consider taking up additional work, starting a side hustle or any other means to generate additional income to help you pay off your debts. If you are unable to do any of this, it may be worth thinking very carefully about taking on more debt except when it is necessary. You may want to think twice about getting the latest iPhone or Tesla if it’s going to mean more unmanageable debt for you.

A wise African Igbo proverb goes “Echi di ime”. Literally translated in English as “Tomorrow is pregnant”, and loosely interpreted as “nobody knows tomorrow” speaking to the unpredictable nature of the future. Even when we have planned so carefully, emergencies could still happen, and unforeseen circumstances could arise necessitating an adjustment in our plans. A clear example is the COVID-19 crisis which rocked the world for the last few years. Picture what you were doing 3 months prior to the lockdown in the UK. Did you ever imagine that in just a few months, the world would be such a different place? The sheer lack of preparedness displayed by global leaders and businesses in the light of the Coronavirus pandemic showed that very few people expected or prepared adequately for it. During the uncertain times of the COVID lockdown, our bundle of joy made his grand entrance to the world, just as millions of babies were also born around the world during the pandemic. Parents who suddenly found all or part of their income gone may have found it difficult to cope if they didn’t have savings to fall back on even if they were able to access some sort of financial support like bounce-back loans. At the height of the pandemic, the world reeled from the human loss as well as the economic impact of the pandemic. Many jobs were lost, incomes disappeared, and some industries went into melt-down mode and never fully recovered. The world remains an uncertain place and things could change quickly so it is a good idea to put away some funds that are easily accessible, as part of your overall financial plan. The purpose of your emergency fund is to serve as a sort of financial cushion to help you weather any unexpected bumps. It is even more important to have an emergency fund if you are planning for a baby. How much you save as an emergency fund will largely depend on your own unique personal and family circumstances. However, a good rule of thumb is to have easily accessible funds that are enough to cover at least 3 months of your essential expenses. Some people feel more relaxed when they have up to 6-12 months of expenses covered in their emergency fund and others may get by with fewer than 3 months. Obviously, this will be hard to do if you have no idea how much you spend monthly on essential things. Just to be clear, your emergency fund should not be for investment in the stock market, bonds, commodities or for any sort of speculation in cryptocurrency or any other investment. The fund must be accessible every time. You may consider a high-yield savings account as an option to hold your rainy-day fund if you can gain access to it easily whenever you need it.

I coined the fancy-sounding acronym ‘AMASS' in 2020, just to help me drive home a simple point. Copyright infringers beware! AMASS simply refers to a system that you put in place to automatically help you save money without requiring much of your willpower. This is how it works; from the moment you decide that you are going to be a parent (even if that is a few years before you actually have a baby), consider setting up a system with your bank account that automatically deducts a percentage or a specific amount of your monthly income and then automatically deposits it into a specially designated account for the baby. This could be a painless way to accumulate some savings for your little one and could also be applied to other projects as well. Begin with the end in mind – start with how much you want to save with this system and then set up monthly deductions with the aim of arriving at your goal. This fund could serve as an emergency account or even a seed capital for jump-starting an investment portfolio or college fund for your unborn child.

If you have been thinking of increasing and expanding your streams of income, expecting a baby may give you the momentum you need to launch a business or side hustle. We launched an e-commerce store about a year before our baby arrived. I am glad we did. Even if you don’t launch a business, consider a side hustle that will add to your income. Find ways to utilize your skills and talents to get paid. You or your partner may also consider taking up more work in your regular job or business to get an additional source of income to your portfolio.

Well, you don’t really have to start a cattle herd for your little one, unless you are quite keen on ranching. However, I thought the story behind that idea will help illustrate this point. In January 2014, while on a strategy and planning retreat with my team at the breathtakingly beautiful Obudu cattle ranch in Cross River State, Nigeria, I wandered down the hills on a break with some colleagues and engaged the locals in a chat. During our conversation, they let us in on a few vital secrets like where to get the most delicious local cuisine and where to get the best views. However, something struck me during our discussion; a local casually mentioned that his teenage son who barely finished high school education was already a millionaire in cattle! From what I learnt; this wasn’t uncommon among the locals at that time. How did they achieve this? At birth, every child got gifted a small number of cattle, handpicked from the parents’ herd and other family members may decide to pitch in from their own herd. This new holding would then be managed separately by the parents on behalf of the heir. As soon as your child was old enough to manage their own herd, they were handed over the now multiplied herd and this would usually give them a chance to learn on the job and then jumpstart their own holding without too much difficulty. No expensive University education, no Harvard MBA, no need to run around pitching investors and trying to raise capital for your new business. Likewise, consider making a substantial investment to help secure the financial future of your little one. You may not be able to gift your baby with cattle, but you could take a few practical steps to help them jumpstart their financial future. Consider utilizing the power of compounding over time to the advantage of your little heir. You can give them a sizeable gift when they come of age or help them pay for college (if they want to go!). Whether you invest in fixed-income assets like bonds and treasury bills or you prefer to invest in other asset classes like the stock market, real estate and precious metals, it is important to carefully do your due diligence and be well informed before you invest funds into your child’s future. You may want to consider investments with lower risk but also less impressive returns.

Everyone likes a deal, yours faithfully included. Planning well and starting your shopping for baby products earlier than later will give you the benefit of being able to take advantage of deals, discounts, and promos. If you live in a temperate region, consider buying the bulk of the summer clothes during winter and vice versa. Her Royal Sweetness (HRS) aka my wife, oversaw this department. She started her shopping and deal hunting a few months before the baby arrived. This enabled us to make huge savings. If you have the time, hunt for good deals, and take advantage of them.

No free Lunch even in Freetown? Well, you will be surprised at how many freebies and giveaways are available for expecting Mums. Mmanyany businesses have gifts for expecting mums and babies as part of their overall smart marketing strategy. Giving away some of their products allows them an opportunity to not only be generous but also a chance to create brand equity among a highly targeted potential customer base. Start with an online search to see what vouchers/giveaways/discounts are available in your location. If you live in the UK, you may find this link very helpful for getting the best free baby and Mum stuff

Depending on your location and circumstances, you may be eligible for some sort of maternity leave pay or funding from the Government. If this is something you think you may benefit from, start with a search online and speak to other new Mums in your locality who may be able to tell you how to go about accessing the funds

It may not have dawned on you yet but when you have a new-born for the first time, you suddenly have an heir/heiress. You may not feel that you have much to bequeath save your matchless wisdom and impeccable manners! Well, your bundle of joy may not be inheriting as much as the Prince of Wales, however, you want to ensure that whatever resources you have managed to acquire will be allocated exactly how you wish, in the case of your demise. Most people rarely want to think of death especially when they have just had a new baby. However, as life and death can be unpredictable (remember “echi dime”), it will be better to have a plan and not need it, than to need a plan and not have one! Having a new baby is a good opportunity to stop and reflect on any changes you need to make. Have you got a will or estate plan? Do you need to revise your will? Do you need a life/disability insurance cover? Consider speaking to a good financial planner and/or solicitor about planning your estate.

One more factor that may impact your finances positively when you have a newborn is gifts from friends, family, neighbours, and colleagues. This is not part of your active financial planning for your baby, and you obviously don’t have to make plans based on the hope of receiving gifts. However, HRS and I, were fortunate to have been overwhelmed by the outpouring of kindness and generosity from our friends, family, church, neighbours, and colleagues. You may be surprised at the kind and generous gifts you may receive before and after your little one has arrived. Your loved ones may seize the opportunity provided by events like baby showers, baby welcoming parties, naming ceremonies and other such events, to shower your baby and yourself with thoughtful gifts, which of course may mean you don’t spend as much as you would have had to.

Conversely, don’t worry about what gifts you receive or don’t receive; I couldn’t resist concluding this point with two quotes from Jesus' words from the Bible “it is more blessed to give than to receive” and “Give, and it will be given to you. A good measure, pressed down, shaken together, and running over, will be poured into your lap. For with the measure you use, it will be measured to you."