Everyone knows that being a parent is expensive, but it doesn’t actually hit you until you start seeing the bills. Couples will spend a small fortune before their child is born, and things don’t get much better once you’re officially a family of three. But while it may require a bit of juggling, there’s no need to stress or panic about your finances. Here are 5 ways new parents can be smarter with their money.

Build or increase your emergency fund

Having an emergency fund is vital for any family, as unexpected expenses could pop up at any time. Generally speaking, you want to set aside six months’ worth of expenses in your emergency fund. That may seem like a considerable amount, but it’s meant to cover your costs if you’re ever laid off for an extended period.

Understandably, some people may struggle to set aside that much, so try to start small. Set up an automatic transfer of $50 that goes from your chequing account to your emergency fund every month. The odds are you won’t even notice that money missing. Increase that amount slowly until you reach your goal.

Start investing in an RESP

If you want to help your children with their education, setting up a Registered Education Savings Plan (RESP) is arguably the best thing you can do. When investing in an RESP, the government will match your contributions by 20% (up to $500) thanks to the Canadian Education Savings Grant (CESG). This match is available every year, but there’s a lifetime CESG limit of $7,200.

Basically, if you put $2,500 in your child’s RESP every year, you would get the maximum match of $500. It’s worth mentioning that lower income families can earn up to an additional $100 from the CESG, but the same lifetime limit applies.

The CESG is an incredible incentive, but you shouldn’t open an RESP with the first company that you come across. Banks, robo advisors and other financial institutions all offer different products that come with varying fees. Always do your research before committing. 

Redo your budget

Adjusting your budget is one of the hardest things to do when you have a child, as it’s hard to predict what your spending will look like. First off, you need to factor in the lower income (assuming one parent is not working). You then need to project what expenses will come such as clothes, child care, diapers and other baby accessories.

Since your spending is up, you’ll likely need to adjust your existing budget. The odds are you won’t be spending as much on eating out and transportation, so that’ll help. It wouldn’t hurt to look at some of your existing services including insurance, your internet provider, and gym memberships to see if there are any ways you can save.

Remember, budgets continuously change, so you need to review yours regularly. Don’t forget to add lines for your emergency fund and RESP contributions when you make your update.

Consider buying used or accepting donations from family

The biggest mistake I made as a new parent was buying almost everything new. I wanted the best for my daughter, but the reality is that buying new can cost a small fortune. Had I bought used or accepted more donations from friends and family, I could have easily have reduced my baby expenses by about 60%. That works out to thousands of dollars I could have put back in my pocket.

Some people may not like the idea of used, but here’s the reality: Children grow fast, so there’s a good chance that anything you can source secondhand has barely been used. When it comes to major expenses such as strollers, high chairs, toys and even books, the costs add up fast. Take a look online for gently used items or see if any friends are looking to get rid of the things their children have outgrown. I guarantee you that it won’t be hard for you to find what you’re looking for at a deep discount.

Maximize your banking solutions

Families don’t typically think much about the way they bank, but I believe that having a strategy in place will maximize how you spend and save your money. Take a look at where you bank now, and what fees you’re being charged. Quite often, if you get a premium bank account and keep a minimum balance, you may get your monthly fees waived. You may also get free banking services such as a premium credit card, safety deposit box, bank drafts and more.

Another way to make your money work for you is to set up a high interest savings account with a digital bank. Many of these accounts pay around 2% interest, which may not seem like a lot, but it’s way more than the 0% interest that most traditional banks are paying. Online banks don’t need to replace your regular bank – think of them as one part of your banking needs and the perfect place to park any savings.

Finally, look at the credit cards you use and see if you can use them to your advantage. With increased spending, you could take advantage of any sign up bonuses. Using a cash back credit card will earn you some money with every purchase. Getting a supplementary card will help you earn points/cash back quicker, but keep in mind that it won’t help the secondary user’s credit score.

Getting your finances in order might not be top of mind for new parents, but if you take the time to get things in order, you can be on the right path for a long time.

Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances. His blog Money We Have is one of Canada’s most trusted sources when it comes to money and travel. As a completely self-taught, do-it-yourself investor with no formal training, he makes money easy to understand for all Canadians. His specialties include personal finance, budget travel, millennial money, credit cards, and trending destinations.

Barry Choi is a paid spokesperson of Sonnet Insurance.