We all know the decision to start a family is a really big deal. If you’re lucky, you have family members and friends who’ve been there and offer their best advice. Parenting advice is one area, but the financial advice is an entirely different ballgame. Getting yourself and your family financially prepared for the arrival of your first child will take some work. Face your financial reality by asking yourself some of these important questions:
What does our budget look like now? You have to be consistent when directing your money at the start of each month. If you’re not used to budgeting, give yourself about three months of dedicated practice, and I bet you’ll quickly get the hang of it. Living on your budget should become a regular practice, and you should get in the hang of it before your family welcomes your new addition. You and your partner should both be practicing this, and working together if you’re sharing a common budget. It’ll be easier to start and implement these things now, before the baby arrives.
Understand your health insurance and the costs you can expect with delivery: Having a baby is expensive, even with health insurance. You should do your best to plan for all of the costs associated with delivery. Do some research and talk to your insurance provider to see what this is going to look like for your delivery and recovery time. You’ll want to start finding your doctor, your birthing center of choice, and the doctor you’ll want caring for your new baby. Healthcare costs are a big one for new parents, so keep this on the forefront of your financial planning.
Will our take-home pay change once the baby arrives? Are we planning for maternity or paternity leave? Will both partners continue working? Will one of you stop working to care for the child? Will we need daycare or a family member to be taking care of the child while we’re at work? Start doing the math and running the numbers. These are big questions! Do both parents get some time off for parental leave? Find out how much time will you get, and if it will change your budget. Sometimes, childcare costs can add up to be more than one spouse makes for a paycheck each month. It might be a sound financial decision for one of you to quit working, but you might have better options with family members and other options. Lay out your own options and see which ones you can afford.
Work on your emergency fund. Not only does your emergency fund need to protect you and your partner (and your home and life) but adding a new family member means it needs to protect them too. Complications can arise in a pregnancy, and being as financially prepared as possible for any surprises is a good idea. If you are having trouble finding extra savings in your budget for emergency funds, try skimming back on a few select debt payments, maybe switching over to minimum payments while still pregnant, and putting extra funds in your emergency savings. Once mom and the baby are both declared healthy, you can switch back to your normal savings habits. Taking time to rearrange how much money you contribute to different areas of your budget is a good idea from time to time. You can always change things back to normal 6 months or a year from now.
Set aside some extra money for mom: Your clothes will be getting smaller, and you’ll be eating for two for a while. There are probably a lot of additional healthcare items and vitamins you might need, so plan on budgeting a little bit more in some of these “everyday” necessities categories.
Shopping for the baby: Once it has all set in for you, you’re probably going to feel very eager to start buying a lot of baby accessories! It’s only natural to get excited about this part of parenthood, and those baby clothes are just too cute. Do your best to avoid using your credit card for the baby stuff. If you can’t pay for it outright in cash, it can probably wait. Your baby won’t notice the cute clothing and the decorations in their nursery right away, and spending less money on those things does not make you a lousy parent. It means you’re a very mature parent! Take some time to see what friends or family members might have in the way of hand-me-downs. Once your baby is born, it will grow quickly and you’ll be amazed at how fast they will outgrow their clothing and other items. Spending more on the important things – like a carseat or a crib – will matter way more than spending a fortune on cute onesies and clothing accessories. Prioritize the most important things you need to buy for the baby, before their arrival. Cut out all of the non-necessities.
Talk to other experienced parents: Parenting is so complicated and there are a lot of right ways to do things. Having a support network of other parents to ask questions to or seek advice from is really helpful. Find those people in your life. They might be your parents, or your spouse’s parents, it might be your neighbor, or even your best friend from college. Asking questions to an experienced parent who’s been there before is a great thing for new parents.
Your financial adjustments won’t stop once the baby arrives, and once your child starts growing up. These tips only skim the surface of the real preparations it takes for parenthood, so we’d love to hear the tips you have for new parents in the comments below. If you’ve been here before, share your expertise with us!
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