If you’re a new parent, you’ll probably have some sleepless nights. But worrying about how you’ll pay for the next package of diapers or college tuition shouldn’t be the reason. Use these strategies to cut costs now and build wealth long term, so you can focus on the joys of parenthood.1. Ask friends and family to contribute to a 529 plan
Like a retirement plan, a 529 plan rewards you for contributing early to a far-off event: your child’s college education.
The most widely available type of 529 plan is a state-sponsored investment account earmarked for education expenses. You won’t pay taxes on money you earn from your investments, or when you withdraw from the account to pay for college. Many plans have online portals that allow friends and family to contribute to them, perhaps as baby shower or first birthday gifts.
You can open a 529 plan in any state, not just the one you live in. In fact, the 529 plan your state offers isn’t always the best choice, though some states give residents a tax break for using it. NerdWallet’s 529 comparison tool will show you whether another state’s plan might offer lower fees or more investment options.2. Refinance your student loans
If you’re still paying off your college loans, student loan refinancing could get you a lower interest rate and a lower monthly bill. As a new parent, that means more money for other costs like day care, or — gasp — the occasional night out.
After assessing your income, credit score, job history and educational background, a refinancing lender will offer you a lower interest rate on your current loans if you meet its requirements. High-interest private loans are excellent candidates for refinancing. You may want to keep your federal student loans, though, if you’ll take advantage of federal repayment or forgiveness programs. You forfeit access to those benefits when you refinance federal loans.3. Don’t forgo your employer’s 401(k) match
Many new costs will compete for your budget’s attention when your baby arrives. But continue saving for retirement, at least up to the amount your employer matches if that’s available to you. While you won’t save money in the short term, continuing to contribute means not having to catch up 20 years from now, right around the time you’d rather pay off your mortgage or put extra funds toward your child’s college expenses. You’ll also save your child the budgetary and emotional strain of providing for you in the future.4. Use a rewards program for baby gear
Strategic spending on everyday purchases can save you a significant amount over time, especially since you’ll have many of the same recurring purchases, like diapers, formula and baby wipes. Use rewards programs at specific stores instead of running to the local drugstore to grab one-off items, says Danna Jacobs, a certified financial planner and founding partner at Legacy Care Wealth in Jersey City, New Jersey.
Amazon’s Subscribe and Save option offers discounts on eligible items and delivery at a regular frequency, but beware of potential price fluctuations. Some credit cards will get you cash back at the types of stores you buy from most often, like supermarkets. Pay off your full credit card balance every month so you don’t rack up interest charges on top of your new baby-related costs.5. Save on child care with a flexible spending account
Child care is one of the biggest new expenses you’ll have to cover if both you and your partner plan to work and family members aren’t available to help out. Many employers offer dependent care flexible spending accounts, which you can opt into and fund pretax from your paycheck.
You’ll choose an annual amount to contribute, and you can use those funds to pay for child care, preschool or summer day camp, for instance. If your tax filing status is “married filing jointly,” “single” or “head of household,” you can contribute up to $5,000 a year, which also lowers your taxable income.
Research local day care facilities and estimate how much you’ll have to pay per month. Jacobs suggests setting that amount aside in a savings account in the months before both of you return to work so you get used to operating on a tighter budget.
The sooner you prepare for the new shape your finances will take, the more energy you can spend savoring new parenthood.
This article was written by NerdWallet and was originally published by Forbes.
The article New Parents: Save Money (and Sleep Better) with These 5 Tips originally appeared on NerdWallet.