I am declaring this month to be Finance Focus February.
Here I am, about 26 weeks pregnant. This whole nesting thing has kicked in and I’m dying to reorganize something in our home. I’ve already got my hands on our garage and the closets and the kitchen. But I need something else. So since it’s late and not the easiest for me to be sneaky anymore, I’m on the computer. With nothing to really do, my brain starts wondering and I start worrying. Insurance for the baby? I have that figured out. Maternity leave? Luckily, I work for my dad’s company so I can stay home or take the baby with me. It’s whatever I feel comfortable with. Money? Do we have enough?
It’s no lie that money can stress me out. I have this love-hate relationship with money. I’m pretty sure most of us do. We could always do with a little more (not a lot, we don’t want to be greedy or anything), but we seem to get by with what we have.
As I’m getting closer and closer to this baby’s arrival I have been on full-attack mode when it comes to our finances. I know that babies are expensive. I just don’t know how expensive yet. So, J and I have made a pact to be really focused and really diligent about our spending until the baby comes. That way we can have our savings built up and be ready to tackle anything.
Back in January when I was doing our annual budget, I had an aha-moment…
…I realized we need to plan as if the baby was already here.
The last thing we needed to be worrying about or stressing over was our finances when we’re trying to learn how to take care of another human being. I knew something was going to slip. It just had to. There are only so many balls a person can juggle before they all come tumbling down. So until I learn how to care for a newborn baby and what our new “normal” is going to be, I didn’t want to be navigating a new financial situation. Make sense?
We budgeted for all of the baby expenses that we knew of back in January.
Yes, the baby isn’t here and we’re not planning for him to make his debut for a few more months. But I knew how much daycare was going to cost each month. I would share that number, but from talking with my friends that have newborns in bigger cities, I realize just how lucky we are – like half-as-much lucky then they are! So thankful!
Here was our master plan: Twice a month, I take our cost of daycare (let’s say $900 for the whole month, but it’s not that!) and we split it into two payments of $450 each. Then we take the amount and transfer it into our savings account. We’re already learning on how to get by with $900 less each month AND we’re building our savings account a little faster for those rainy days.
I’ve more than doubled our grocery budget back in January and am transferring our leftover amount each month into our savings. Because… honestly I have no idea how much diapers, wipes and everything else is going to cost us each month either.
Here’s my other finance focus thought…
Our emergency fund is the same as our insurance deductibles. Now we’re adding another human being, which means a higher deductible for one of us. So by building our emergency fund we are preparing for an unexpected expense. When something comes up, because we ALL know it will then we won’t be in too much pain.
Now, this is a learning curve for both J and I. As both new parents, everything is going to be… well, new. So I did a little research and saw on Parenting the cost of raising a newborn is roughly $12,000 for the first year. Gulp! That’s crazy! And that was for 2010! I know inflation and costs have just continued to climb ever year so it’s going to be a lot more now. All I know is that we’re taking the right steps to get there. We will make adjustments as it goes along. But for now, we’re rocking and rolling. What did you do to prepare for your first baby? Any tips or tricks?