
In some ways, you’ll never be financially ready to have children. There are just too many expenses you can’t predict. For example, how many birthday presents will you have to buy for kids in your baby’s day care? How much does it cost to have a birthday party for a 1-year-old, 2-year-old, etc? You don’t usually think to budget that stuff.
But not everything comes out of the blue like that. There are some things that you can predict and plan for. My suggestion, before you even begin to look at numbers, is to sit down with your partner (or alone if you don’t have one), and decide what your values are. Figures aside, what do you want your family’s life to be like?
If you want one of you to be able to stay home, if you want the most exclusive daycare, or if one of you wants to take the baby to work, what are you willing to sacrifice to make those things happen? Once you have your values articulated and agreed upon, then it’s time to get the budget out. Can you get by on one income? What would you have to save to buy you 6 months at home? 3 months? 6 weeks?
Times are tight for a lot of people right now, but here is one piece of advice I want you to remember. Money is your servant, you are not money’s servant. Money works for you, you do not work for money. Now, I know the reality is that bills have to be paid, and sometimes there’s too much month at the end of the money. But your life choices need to be values-driven, with a realistic respect for money, not money-driven with a wistful glance over your shoulder at your values.
Having said all that, here are some things to consider about your financial situation if you are considering getting pregnant.
- What is your employer’s family leave policy? Federal law mandates that they must allow you 12 weeks of leave without penalizing your job, but that’s unpaid leave. Check to see if your income will take a hit if you miss work.
- What is your insurance provider’s pregnancy and childbirth policy? Check to see how many ob/gyn office visits you get and how your insurer will respond if there are complications with the pregnancy or delivery.
- Save soon, save much. This is good policy for life in general, but if you are hoping to quit or cut back work for one parent, you want as much as possible saved up. And believe me, it’s never too early to start scoping out those Roth IRA’s for college.
- Overestimate expenses. Abide by Murphy’s Law–anything that can go wrong will. When you budget for the coures of your pregnancy, take into account that some women end up on bedrest for long periods of their pregnancy. And if your baby is born early or with problems that delay him or her leaving the hospital, you want to be there, with your child, not at your desk. Plan for adversity, and be pleasantly surprised if it doesn’t happen.
- Keep couple time in the budget. We’ll talk about this more when we get to emotional readiness, but your couple relationship will determine what kind of home your baby grows up in. Budget date nights and babysitters–even if it means starting a fund for it now, before you’re even pregnant.
- Be open to renegotiation. If you don’t yet have a child, you can’t imagine how deeply in love you’re going to fall. There’s no point in me telling you, really; it will overwhelm you and change everything you thought you knew. You might find that you can’t bear the thought of going back to work and leaving the baby in 6 short weeks. On the other hand, after giving the stay-home thing your all, you might find that you are frustrated and discontent without your chosen work to balance your life. Make sure you and your partner make room for the reality check that the actual baby (rather than the “planned baby”) will bring.
- Budget! All of the above assume that you have a budget, so if you don’t have one, make one! There will be enough unexpected expenses that you want to have control over as many details as possible. You want to be proactive, not reactive, with your money. Remember, you’re the boss. Money works for you, so you have to tell it what you want it to do.
- Taxes. You have to determine what your timeline is, but all I’m saying is that a baby born before December 31 is a sweet little tax deduction.
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