This post is sponsored by BECU. All opinions are my own.
Dan and I were married for (almost) six years before we got pregnant. We went back and forth debating whether or not we were “ready” or had enough space (literally, emotionally, financially, etc.) for a baby. Then, on the most special April day, thanks to FIVE home pregnancy tests (one can never be too sure), we found out I was pregnant and we were thrilled and nervous and excited and terrified, but mostly just completely overjoyed to bring our own little nugget into this world.
Now, let’s be honest, I’ve wanted to be a mom since before I can remember. My sister and I would play “mom” and take care of our little baby dolls with more love and admiration than you can imagine. But, when it comes to a real baby, it’s not all fun and games. There are so many big decisions involving insurance plans, career changes, sometimes moves, and of course, endless budgeting changes to consider. Some of the initial questions we were asked include: What are you going to name him/her? What will you choose for a nursery theme? Are you going to breastfeed or formula feed? Have you learned how to swaddle? Cloth diapers or disposable? (Let’s be honest, I’ll be using disposable).
With all the decisions and preparations, one of the most important aspects of planning for a baby includes making sure you are financially prepared for your bundle of joy. So, we’ve partnered with our friends at BECU to put together a list of eight ways we are getting our finances in order before the baby arrives in the new year.
1. Save, save, save!
The general rule of thumb I have always heard when it comes to your emergency savings is to save enough for three months of spending. But, when you’re planning on welcoming a baby, expenses go up and you can’t risk not having enough money saved for diapers or food, so we have been advised to have a six month emergency fund just in case. That may sound like a difficult task, but thankfully, BECU offers easy tips to start and build an emergency savings fund!
2. Take a financial inventory
Where do we currently stand with our income and expenses? Can we pay the bills on time? Are we sticking to our budget or overspending? It’s important to conduct a financial audit so you’re setting yourself up for success instead of failure. This is also a great time to ask yourself, what can you live without? Do we need the premium cable package with NFL Sunday Ticket and all of the HBO movie channels, or can we survive with the basic package? Asking for a friend….
3. Calculate the cost of a baby and the cost of pregnancy
I didn’t think the big expenses would come until I actually delivered the baby, but as it turns out, I was sadly mistaken. There are so many added pregnancy expenses no one tells you about like all of the extra doctor visits, blood work, special dietary needs (whether that’s trying to eat healthier or eating for two), maternity clothes, the monthly prenatal vitamins, etc. In addition, it’s a good idea to estimate your medical costs so you aren’t blind-sided by a huge medical bill after delivery.
“According to Fair Health, a regular delivery in the United States averages out at $6,598 with an in-network insurance provider. A C-section, on the other hand, costs around $9,000 on average—which means you’ll have a higher out-of-pocket fee.”
Try to think of unexpected bills that will change when baby arrives. Will you use more water for baths or for more loads of laundry? What about increased electricity for baby’s noise machine? It’s always better to be over-prepared and ready for any sort of increase in your monthly bills.
4. Planning for maternity/paternity leave
Before you plan on getting pregnant, you may want to look into disability insurance policies that will help supplement your income when you’re taking time off to care for the baby. They can also pay you for delivery and every night you stay in the hospital. If you time this right, a disability policy can really pay off and help alleviate some of the financial stress.
I know it’s a sensitive subject, but talk to your boss about maternity/paternity benefits offered at your company, then look into the state rules and regulations so you can make plans for child care. Some daycares fill up months to years in advance so it’s important to be prepared, especially with the rising cost of child care. According to the Economic Policy Institute, the average cost of child care in Washington is over $14,000 annually — which is why it is necessary to have a plan to incorporate this cost into your budget.
5. Create a budget just for baby
The U.S. Department of Agriculture speculates a middle-income family will spend more than $233,610(in today’s dollars) raising one child until the age of 17.
A crib, high chair, stroller, clothing, formula, diapers… did I mention diapers? The list goes on and on. You might think your child won’t be asking for money until they’re a teenager, but any new parent knows that’s not the case. While they won’t be verbally asking, necessarily, new moms know babies have a lot of needs, even while they’re still in the womb.
When it comes to shopping for baby or creating your registry, it’s best to talk to an experienced friend. They can help you sift through what you need verses what the catalogs and commercials and mommy blogs are telling you you need.
6. Acknowledge your debt
While we know there is “good debt” and “bad debt,” debt is still debt and it’s important to acknowledge what you owe as you’re adding new expenses to your budget. Make sure you can still make your mortgage payment, student loan payments, car payments, etc. so you’re not digging yourself deeper into the hole. If you’re finding it difficult to meet those minimum payments, try to figure out other discretionary expenses you can cut out to save.
7. Estate Planning
I’ve always thought of a will as something my parents have and I never considered when the day would come when I would need my own. Turns out that day has come and now I officially feel old. As the baby’s due date approaches, it’s important to get all of your affairs in order in case of a tragedy. This includes creating a will, purchasing life insurance so your baby is taken care of, and changing your beneficiaries on your retirement accounts.
Speaking of retirement accounts, it might be a good idea to open a 529 account to save for your baby’s education. Too soon to save for college? Never.
8. Enjoy the journey
You are not in this alone mama. There are unlimited communities of moms with similar due dates online that are there to answer questions, laugh at the symptoms, calm you down when you’re worried you haven’t felt the baby kick in 10 minutes.
Enjoy this spectacularly special time in your life. All of the nausea, stress, and stretch marks are worth it 100 times over. Take a moment to check in with yourself, take a deep breath and marvel at how miraculous your body is as it creates your little human. Speaking of deep breaths… keep taking those. Try to relax. Everything will be ok. You will be an amazing mom.
They say “parenthood is the scariest hood you’ll ever go through” and while that’s likely true, it’s also the most joyous time of your life. So, while we can do everything in our power to plan and prepare to become the best parents we can be, at the end of the day there is no such thing as perfect parents. As we prepare to welcome our baby into the world, we will do so with open arms, loving hearts, and meticulous financial plans.
For additional tips in tricks, check out BECU’s advice on budgeting for babies!
Photos by Sydney Baye Photography.