Congratulations! You are having a baby, now what? That is how I felt when I first found out I was pregnant. I always wanted to be a stay-at-home mom and my husband did not want us to struggle financially, so what were we to do?
We had to develop a plan and stick to it. It was not easy and it was scary, if this is your first child, you know what I mean. With each pregnancy we have had to revisit our plan to make tweaks and to ensure that it still works for our growing family.
These eight tasks will help you become more prepared financially for your new baby and if you already have children, this list will help you make sure you are prepared to continue to provide for your family financially.
Create Spending Priorities
This is imperative whether you have children yet or not, you need to create spending priorities. You need to tailor the way you spend your money to what you value in life. Stop purchasing junk that only adds to clutter, distractions, and will need to be replace in a few years. Spend your money wisely, track your expenses, determine your spending triggers, and figure out what really brings you happiness when spending money.
Establish an Emergency Fund
This is necessary regardless if you want a family or not, you need to establish and maintain an emergency fund. An emergency fund needs to hold at least six months’ worth of income for your household. You do not need to build this fund overnight, you can take your time to build up this amount but you need to start building it today.
You can read more on how to build an emergency fund through this post.
Prepare for Changes in Income
If you are planning to become a stay-at-home-mom, then you need to prepare for the loss of income. This is another reason why creating spending priorities and establishing an emergency fund is so important, you will have a difficult time becoming and staying a stay-at-home-mom without this foundation. Prepare as much as you can now so you will not have to struggle later on with less income.
Create a Budget
If you are not already living by a budget, you need to start now. Once your little bundle of joy arrives, you will be too sleep deprived to actively build up a budget. Go ahead and create a budget that works for you now so when baby arrives, you can easily adjust it to fit your new way of life.
Build a Smart Registry
If you are a first time mom, knowing what to register for can be daunting. Use a site like WeeSpring to help you decide what products to register for and which ones to avoid. As a mom of two, I will give you a few quick items to avoid right off the bat:
- Wipe Warmer
- Pack-n-Play alongside a Bassinet – if you have a two story home, having both can be beneficial but if you only have a one story home, having both just takes up more space.
- His and Her Diaper Bags – this only comes in handy if your hubs will be helping regularly to take your kids places by himself. If he is only seldom taking them places without you, do not worry with two separate diaper bags, it only adds to the clutter.
- High Chair – get a booster seat instead, it will grow with your child and poses less of a “hey Mommy, look how high I can climb” risk. Trust me; I am a mom of two boys who can scale a refrigerator in less than twelve seconds.
- Gender Specific Clothing – avoid purchasing too many pieces of gender specific clothing unless you are planning on having only one child.
- Baby Specific Laundry Detergents – use a free and clear brand of detergent or make your own instead. Baby specific detergents are ridiculously expensive and will eat up much of your budget if you are not careful.
Have Enough Insurance
I am not just referring to car and health insurance; I am referring to life insurance as well. You need to make sure that you and your spouse have enough life insurance to cover not only your deaths, but also loss of income, any debts, and to leave some money for your children. Do not leave the responsibility of paying back those student loans to your honey. Make sure your family is protected in the event of your death.
Have a Retirement Plan
If you are not already contributing to a retirement account of some sort, you should start today. Take advantage of any matching policy your employer offers and open a Roth IRA (especially if you are self-employed). Check with Bankrate.com to see who is offering the best rates and set up an automatic withdrawal from every paycheck to contribute to your retirement account.
Once you have your sweet little baby, you will start to feel the temptations of society all around you. You start to feel that your four-door sedan is simply unfit for your new found family status and you now need to upgrade to a SUV. You will hear all about how your child needs to go into private pre-k and needs to be involved in several play groups.
Avoid these temptations; your four-door sedan will be fine. I have a friend that made due with three kids (two were twins), in a four-door sedan for years, it was not easy but it saved her tons of money over the years until she could afford to out-right purchase a larger vehicle.
Do not fall prey to societal pressures that negatively affect your family’s finances, just say no.
The best way to prepare financially for having a baby is to make sure that you are actively managing your money. Take the time now to invest in figuring a system that works best for you before baby arrives, it will make the transition easier.
What would you add to this list?
Check back tomorrow for another post in our 31 Days of Real Life on a Budget series!
It's less than 10 weeks until Christmas??
And there's less than 6 weeks until Black Friday! 😱 So now, the big question is - do you have enough money saved up to pay for Christmas in cash? If not, now's the time to start saving! Join the Debt-Free Christmas Challenge today and let's make your debt-free goals a reality!