Here Comes Baby: Financially Preparing for the Bundle of Joy
from daveramsey.com on 10 Jul 2015
Long before the bump makes your news obvious, you and your honey will stare at a precious secret: the positive sign. You might gasp, laugh, jump up and down or even cry. After all, you’re having a baby!
As you progress through the trimesters, your emotions will continue to ride the rollercoaster from overjoyed to overwhelmed. To help you keep financial fears at bay, we’re offering a three-part series full of tips for bringing home baby without breaking the bank.
For the first installment, let’s talk about a few things you can do to prepare financially for your little one.
Answer Some Questions
Once you learn about your new addition, all you’ll want to do is dream. What will it look like? Will it have your eyes and my smile? Will its hair be curly or straight? Will it have any hair at all? Will it be a boy or a girl?
Sooner than later, though, you’ll need to float down from your dreams and land on the ground long enough to face your financial reality. You can do this by asking three simple questions.
- Are we living on a budget? If you aren’t consistently telling your money what to do before the month begins, now is the perfect time to start. Dave says it takes about three months to get a handle on budgeting, so you’ve got plenty of time to practice. Trust us. You’ll want to make living on a budget a seamless process before sleepless nights set in. Check out EveryDollar, the new budget tool that syncs across devices making it easy for you and your spouse to know where you're at with your money on the go.
- How will our take-home pay change once the baby is born? Will you both continue working? If so, will you need to pay for day care or will a relative be able to watch your little one for free? Will one of you stay home full time? Decide together what’s right for your family and do the math to see how your decision will impact your finances. Then, live like the changes are effective today.
- Where are we in the Baby Steps? Talk about where you’re at in the process and set a plan in motion for how you’ll continue with the Baby Steps despite possible changes to your income.
If you’re paying off debt, we’ve got a crazy suggestion for you: stop. Continue to make the minimum payments on your debt and save all extra money for potential emergencies throughout pregnancy or at birth. As soon as baby and mom are declared healthy, you can pay off a big chunk of your debt and move forward with your plan.
Set Aside Money for Mom
The aforementioned bump is coming. That means your appetite’s getting bigger and your clothes are getting smaller. It’s inevitable.
Around here we budget for everything. Go ahead and adjust for higher grocery bills and maternity clothing. You can still be smart by shopping at discount stores or buying consignment and borrowing from friends. The evidence of your bundle is a blessing, so embrace it!
Begin to Buy for Baby
Admit it: You’re itching to buy something for your baby. You might even be tempted to buy everything. That’s just love manifesting itself through tiny onesies and little bitty shoes and oh-my-goodness—just buy it all! You have our permission.
Okay, not really. It sure can feel that way though. Baby stuff is so cute and seems totally necessary. Why wouldn’t you spend your life savings decking out the nursery with all kinds of baby luxuries?
Thankfully you don’t need to spend tons of money to express love. Your touch and soothing voice is almost always enough. Of course you’ll need to spend some money, so here’s our actual advice:
- Pay with cash. If you can’t buy it without swiping a credit card, don’t. This doesn’t make you a lousy parent-to-be. It means you’re mature—an important quality for bringing up a baby.
- Cut out non-necessities. Do you really need the latest and greatest baby gadgetry? Or will timeless products and the basics suffice? Talk regularly about where things fall on the needs versus wants list before making a purchase.
- Talk to an experienced mom. First babies present so many options. Do you buy new or used items? Brand name or generic? Do you nurse or formula feed? Use cloth or disposable diapers? With some things you’ll know the answer almost instinctively or be able to discover it through research. For everything else, ask a mom who’s been through this before. Perspective and experience go a long way.
This, moms and dads, is just the beginning. In Part 2 of our three-part series, we’ll talk about the medical costs associated with pregnancy and the delivery of your precious little one.
Already had your first child? Tell us what you did to financially prepare for your baby.