Preparing for Parenthood

After being married roughly a year, my husband and I had the baby talk. 

It might have happened sooner, but there was quite a bit of chaos in our first year of marriage. Inbetween moving, healing, establishing, and communicating we just didn’t even broach the topic of a little tiny human until a year had passed. ​

When I brought it up, my husband’s response was a flat “We are NOT having a baby right now!”. ​

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When I brought it up, my husband’s response was a flat “We are NOT having a baby right now!”. 

After taking a few minutes of careful breathing, we agreed that while now was not the time, we needed to develop some indicators for when the time would be right. And to develop those indicators, we had to have some data, and we had to organize ourselves. 

Over the course of an hour-long discussion, we determined goals across three categories - Financial, Health, and Spiritual Growth/Relationship. (While this blog is most definitely about our journey with finances, I will just volunteer that our health goals involved emotional and physical preparation (including a parenting class), and that since our religion is important to us, we wanted to make sure we were living it more fully in order to raise a child, or multiple children, in such an environment, and we wanted to drastically improve our communication with each other). Within Financial, we had a single goal: a 6 month emergency fund for two adults and one infant, separate from any other savings category (education, home downpayment, or retirement). In time, we added a separate goal: a prenatal/delivery fund to deal with the financial costs of childbirth. 

At only a year of marriage, we were still pretty wonky with how much we were spending, how much we were saving, and how much money it took for just the two of us to both survive and thrive. So, I took on myself a simple yet taxing assignment - to quantify this mysterious “6 month emergency savings” into a single number. 

And my friends, I made a mistake. I googled “baby items I need”. 

Friends, do not be like me. 

I was so immediately overwhelmed by the sheer amount of “stuff” people “need” for their babies! And quite frankly, I was terrified. So, I did what I do best - I sat down with paper, a clipboard, and a pen and I wrote down every single thing I remembered using in my time as a nanny. Then I scratched off the items from that list I felt were extraneous or not a good fit for me and my husband, and I went back to the internet. And that, my friends, is when I found it - the Baby Center Calculator.

The Calculator Experience

I enjoyed this cost calculator for a variety of reasons. First, I found the lists reasonable, yet fairly comprehensive. It also has options for more frugal parenting that yield gradual costs, such as the estimated cost of $19/month to wash and dry cloth diapers, and even had a place to estimate the cost of baby food! 

So, I did what I do: I went down the list on this calculator, I scratched off the things I was fairly certain I wouldn’t want, and crossed them by my husband (who agreed with my analysis). I took the remaining items and found a few possible models of what I would genuinely like and researched used prices. After taking an average of those used prices, I plugged it both into the calculator and into a baby spreadsheet that I made (with two columns “new” cost and “used” cost (because I wanted the psychological thrill of knowing how much money I’m saving)). I read about the pros and cons of cloth diapers in their seemingly infinite varieties. I read about whether white noise machines are a waste of money. I read about what the “best” qualities in a baby monitor are. (In case anyone is wondering, yes, I’m pretty sure Facebook thought I was pregnant, judging from all of the maternity ads I got in the coming weeks). 

In the end, I came up with the following conclusions - if I bought everything on my list new, we would spend $5,145 on a little’s first year - still far less than some suggested amounts. If I bought the majority used (except for a very few items that I want new simply to have new) I would spend $2,584. And that is assuming that I a) didn’t get any free hand-me-downs from friends or relatives, b) didn’t have a baby shower, and c) didn’t get anything from the Buy Nothing Project (which I didn’t know about at the time). 

Will there probably be a few random things that I get that aren’t on this list? Absolutely! But I have 2 rules: 1) if feasible, those things must be used, and 2) each thing must serve a specific purpose. Specifically because of these uncounted things, I rounded up to $3,000. 

Then came the tricky part. I needed to know how much the ADULTS cost! Following the patterns I outlined in the First Budgeting Session post, I determined that at the place we were living at that time, including projected baby cost, an appropriate emergency fund was a whopping $10,700 - an astronomical figure in comparison to our salaries (yes, we were below the poverty line). 

Most parents (or perhaps just most people) looking at that figure would say “that is way too low…” and you may indeed be right. With a recalculation just in the past few months as we move to our new, more expensive house (and to take into account a little bit of lifestyle creep and three years of data instead of one), our new goal is now $12,000 ($2,000 per month). We also are planning for a worst case scenario in pregnancy, which would be that we have to completely max out out-of-pocket costs from insurance, which would result in $6,000 spent on the pregnancy and delivery (I happen to have excellent insurance). All told, that gives us $18,000 to save towards a baby, with at least 75% ($13,500) saved up before conception (since there are 9 months to prepare for a baby while pregnant). 

Of course, there are some assumptions made. We are assuming that our baby will be healthy when born and will not have significant, immediate disabilities (such as Down Syndrome). While we do not deny that having those costs is a possibility, we have age and genetics on our side, and we are comfortable proceeding with the understanding that we may have to invoke additional safety nets through our extended families and/or organizations in our community or our church in order to fully meet extenuating needs. We also have the advantage that my husband’s income is likely to spike drastically in a year, and again in about 3 years, meaning that we are more likely to become self-sufficient even in the wake of extreme adversity. We are also assuming that we will only use occasional babysitting, or, if routine sitting is warranted, be able to pay family members a lower wage than the going daycare rates in our area (which are astronomically high). Since we live close to family and are specifically designing our careers to have work-from-home capacities and angling towards flexible hours over highest wages, we feel that we can get by without infant daycare and utilize family members when our baby starts to be too awake for too many hours a day. While we have not firmly decided about daycare during toddler years or whether preschool is right for us, we are open to the idea and will plan accordingly when the time comes. But for right now, an $18,000 baby preparation fund sounds just right. 

What financial (or other) indicators did you make for preparing for a baby? How closely did your predicted spending line up with actual spending? If you overspent, what financial advice would you give for those preparing for a baby?