Q&A: Financially Preparing for a Baby
Michael asks: How did "stork mode," as Dave Ramsey fans call it, affect your baby steps? We're thinking about a curtain-climber and I'd like to anticipate what to expect (if it can be). Also - what kind of sinking funds did you put in? We're working our way through the debt snowball and we've had to put in a clothes envelope, Christmas 2013 envelope and car repair envelope. Just want to see if you had done this and if it slowed momentum.
Great questions, Michael. First of all, I'm not sure I've ever heard the terms "stork mode" or "curtain-climber," but I like it and I think I know what you are referring to. I'll try to define "stork mode" for those who are unfamiliar…
"Stork mode" is a holding pattern of sorts for your financial goals once you find out you are expecting a baby. Putting your financial baby steps on hold is common to prepare financially for an actual baby.
For us, our journey to better finances began a couple years before we got pregnant. We were married in 2006 and thought we would wait 5 years before having kids. Of course God has his own plans, but in our minds that was what we were shooting for.
Well, fast-forward to our fifth wedding anniversary and we were expecting our first baby, so it's kind of funny how God's timing works sometimes. Anyway, with that timeline in mind and having been through Financial Peace University, we knew we needed to whip our finances in the tushy before that 5-year mark came.
So, I decided to get a second job for 16 months so we could hustle our way through our debt snowball and dig out of some of the mistakes we had made financially. I wanted to get through that period of working nights (after working my day job) before we had a baby so I wouldn't miss out on family time. By the time we were pregnant, we had been debt-free (except for our house) for 7 months. And in that time we had worked hard to build up our emergency fund and also save up a little chunk of money that we called the baby fund.
*With that back-story in mind, as a general rule of thumb, the earlier you can start your journey toward being debt-free, the better off you will be when the baby comes along.
Financially Preparing for a Baby
There are a couple different angles you need to consider when preparing financially for a baby.
1. Pre-baby: Again, as soon as children start entering your thoughts, it would be a good time to start preparing financially. They are a marvelous blessing, but can really drain your finances and hinder your long-term financial goals if you don't start right away. Before your baby comes there are a number of things that will need to be considered:
Tip: Try to get some of this stuff for free or used/secondhand. Craigslist and garage sales are great places to start. There are also used baby gear stores that have good deals as well.
- Nursery: This includes the crib, changing table, dresser, sheets and monitor, just to name a few.
- Clothing: Kelsey's sister has three girls, so we pretty much get everything handed down (and we love it!). Still, we have a small budget for clothes for Rooney so we can fill in what's needed/wanted.
- Car seat: If you get an infant carrier, you'll also have to think about additional bases for multiple vehicles. We got by with just one. And once they weigh more than 20-40 pounds (depending on your car seat), you'll have to start looking into the next size car seat. We were surprised how quickly that $200 purchase snuck up on us.
- Stroller: We purchased our Graco infant carrier, base and stroller as a set. We don't super love it, but it was on clearance and a good deal. We would have loved an expensive stroller, but we get by. Craigslist and garage sales are another great place to look.
- Miscellaneous: The list is endless: toys, teethers, bottles, breast pump, bath equipment and toys, toiletries (diaper cream, lotion, hair brush, Boogie Wipes, etc.)... We collected this stuff from a multitude of places (mostly baby showers).
All these things that are needed/wanted cost money. You can try to spread it out over time by purchasing things here and there, or save up a large sum and get it all at once. Either way, it will need to be worked into your savings plan or your monthly budget to make all of these up-front purchases.
2. Post-baby: This requires a different tactic. It requires you to be one with your budget, and plan accordingly so that you have enough margin month to month for the expenses that come after the baby arrives. Here are a few examples to trimming the fat:
- Get rid of cable: It was a hard decision, but not that bad in the grand scheme of things. We choose to pursue hobbies such as blogging rather than watching The Bachelor. It's proven to be a good choice. We've lived without cable for more than a year and a half now.
- Sell stuff: We never really did this. We have purged our basement, but didn't find much to sell. But, making donations is always good.
- Refinance your home: We signed our refinance papers less than a week after Rooney was born. Rates have been at an all-time low for a while now.
- Cut unnecessary expenses: See you later, fitness club membership that was never used. Try to scan your budget and really think about what you need on there.
Monthly Expenses for a Baby
We have a budget line item for baby expenses that run us about $200 per month (with a 10-month-old). When she stops drinking formula, we will save a chunk of change, but then she will be eating table food so we will likely have to increase our food budget.
Here is a list of our monthly expenses, and you can read about the costs associated with each in our budget with a 6-month-old post:
- Day care
- Health insurance
- Health care
- Chiropractic care
Preparing and managing your money when planning to have a baby can be overwhelming and exhausting. It certainly was for us in the planning stage. However, I will say that once the baby arrives, it's still important, but you will have a new perpective. It seems to work itself out month to month. We operate under the premise that people have kids all the time, and many others have more kids than we do. If they can make it work, so can we. And we make sure to count our blessings every day.
What's your biggest financial struggle as you prepare for a baby?