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Baby Budgeting

Having a Baby? Let’s Talk About Money!feet-619534_1280

Any of you who’ve had a child know that when that little bundle of joy shows up, there are a lot of adjustments that need to be made. Your house is filled with stuff you didn’t even know existed a year ago.  Your schedule is upside down. A full night’s sleep is a thing of the past. And there is a huge financial impact in adding another person to the family.

Internet statistics show the cost of raising a child from 0-18 years at approximately $250,000.  Some of that cost is a bit contrived. For example, if you stay in the same house there is really no additional housing cost for the baby. But no matter which statistic you use there is going to be a financial impact both during pregnancy and after the baby arrives.

So let’s review some ideas for preparing financially for that beautiful little gift from God.

Just like all the other advertising in our consumer driven society, you will be barraged by all the things you absolutely MUST buy for your baby. Except for a car seat, diapers and wipes (cloth or disposable), comfy clothing, bottles and formula and a place to sleep, babies do not need much. Bassinets are outgrown far too quickly and furniture you already have can be modified and used as a diaper-changing table.

If you get the word out, many things you need can be borrowed or purchased from friends, relatives or church members. Garage sales or thrift stores are a great place to get maternity clothes as well as baby items. Maternity clothes are only worn for a few months and babies grow quickly, so most of the items are in perfect condition, even though they may be used.

Resist buying everything you see in the baby store or you will end up with lots of non-usable items. And you will probably make better choices about what your baby really needs if you spend a few days/weeks getting to know them, what they like and what you think you’ll actually use.  If your baby screams when you turn on the vibrating bouncy seat, you probably don’t need to spend the extra money on the vibrating baby swing.

Even keeping the baby related purchases to a minimum, baby will have an impact on your spending plan, because expenses are going to increase. You’ll have new expenses related to things like diapers—lots of diapers—baby formula, co-pays on health insurance, doctor bills and clothes.

The prospect of having a child should change your financial priorities and motivate you to improve your financial situation. Because of the cost impact of the new baby, it is important to be sure your emergency fund is available and to pay down your debt. You want to be in a situation that you can cover those baby related expenses without going deeper into debt.  You will also want to start a college saving fund for baby.  It is much easier to save a little when they are first born, than wait till they get into high school and play catch up on the college savings.

What is the impact to the family income when baby arrives? If the mother works, will she continue working outside the home after baby’s born or will she become a stay at home mom? Will dad become the stay at home parent? If one of you will be the full time caretaker, then the spending plan needs to be adjusted to reflect the decreased income. If you are planning to be a stay at home parent, then try to live on one income during your pregnancy, saving the other income. The quicker you start living on just one income, the better prepared you will be for the child’s arrival.

If you decide to both work after the baby is born, what increased expenses can you anticipate?  There’s childcare. You’ll probably eat more take out meals or convenience food. Your car expenses may increase if the daycare is not on your way to work.  And you can be sure that the baby will result in increased dry-cleaning expenses.

Talk with several couples who are fiscally responsible and have recently added to their family to learn about the financial challenges they faced. It’s always nice to have someone who has “been there and done that” warn you about the pitfalls that are coming your way.  They will also be a great blessing in helping you avoid the problems they discovered.

Psalm 127:3-4 tells us that children are a gift from the Lord and they are. Watching them grow and change, start to talk and walk and become their own little person is a great blessing from the Lord. And that blessing will be doubly rewarding if you are financially prepared for it.

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