Budgeting for baby

posted 2 weeks ago in TTC
Post # 2
Member
2364 posts
Buzzing bee
  • Wedding: October 2017

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@stephy1872:  Our income has steadily increased after welcoming baby so we’ve been fortunate to make more money.We still max out retirement and enjoy multiple vacations per year,  which are our priorities as a couple. But we’ve definitely cut back on eating out, shopping and just carefree spending in general. This is not because our finances are tight. It’s because we are saving for our son’s future just as much as ours so we’re a lot more mindful of where each penny goes. 

Post # 3
Member
1016 posts
Bumble bee
  • Wedding: August 2019

I mean, I think that except for people in the uppermost income bracket, having a baby DEFINITELY decreases the amount of money you have to spend on fun things. Everyone I know accounts for their whole paycheck (bills, savings, fun), so suddenly having $800+ a month in added expenses means something has to give. 

My husband and I are TTC towards the end of the summer, and while we make decent money, we don’t make “we can continue to live exactly the same and not miss a daycare-payment amount of money” money. We’ll DEFINITELY need to buckle down, because we’re pretty loosey goosey right now. But, everyone I know says it’s a fairly natural change (you eat out less, you desire fewer things for yourself), and there are ways to make it work. My cousin supports a family of 8 on his salary, which is around $50,000 in a medium cost of living city, without taking on debt or requiring assistance. People make it work!

I think you’ll also probably get a fairly skewed representation of what the average family budgets for a baby. People on WB are super into being debt free and having 12+ months of emergency savings in addition to regular savings, which is not at all the norm among anyone I know (where a modest student loan payment and 3-6 months of savings is considered very comfortable). 

Post # 5
Member
3016 posts
Sugar bee
  • Wedding: December 2017 - Courthouse

I’m a new mom and I wanted to add that it’s also natural to not spend as much. That coupled with the coronavirus, it’s easier to save money. 

You might be spending more for last minute items you need, but you’ll probably spend a lot less on gas, eating out, entertainment, etc. 

 

Post # 6
Member
406 posts
Helper bee
  • Wedding: September 2020

Maybe start now and create a savings account of what you “think” you want to budget for when accounting for a baby. Whatever amount that seems right would go right into savings: daycare, increased household costs, etc. After a few months you’ll quickly see what your thinking pattern would be.

We did something similar to this when we were buying a new house and wanted to “test” how our increased mortgage would affect our monthly budget. 

Post # 7
Member
1194 posts
Bumble bee

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@dianaj17:  My cousin supports a family of 8 on his salary, which is around $50,000 in a medium cost of living city, without taking on debt or requiring assistance.

I just wanted to say that this is an amazing accomplishment – talk about budgeting prowess!! 

Post # 8
Member
2931 posts
Sugar bee
  • Wedding: July 2018

Well yes, kids are expensive.  Be prepared for things you don’t expect.  We make a pretty good living (both have master’s degrees and careers), but our son is medically complicated and unfortunately our health insurance sucks.  So on top of all other kid-related expenses, we spent $32,000 on health insurance costs last year alone.  Luckily we can afford it, but of course it takes away from other priorities (saving for retirement, etc).  It’s all part of parenthood.  Be prepared for it to cost more than you expect.

Post # 9
Member
1016 posts
Bumble bee
  • Wedding: August 2019

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@krm1984:  right?! I can’t imagine supporting our family of two adults and two pets on that much!

 

Anyhow, yes OP, I definitely “worry” about money post-baby, because I hate budgeting and am already not great at it. One thing I play to do is, as soon as we’re TTC, pay what will be the daycare payment into savings. That money can then go towards paying off our misc. small debts, buying baby gear, maternity leave fund, etc. At some point though, if we want a baby, we’ve gotta go for it and figure it out!

Post # 10
Member
549 posts
Busy bee

one thing that helped me plan was to make an extremely detailed itemized monthly budget in excel.  it really gave me a good idea of what we were spending each month and where that money was going.  (and for expenses that weren’t incurred monthly, we just divided the yearly expense up per month).  it helped me get a clear idea of how to budget for baby.

for example, in our case, we were spending a decent amount of money on travel and dining out.  we figured these expenses would both decrease significantly once baby arrived and this would be an easy category of expense to decrease or reallocate to day care, etc.  

Post # 11
Member
2162 posts
Buzzing bee

Do you have a budget?  You should make one even if a lot of money is being saved.  Then add in childcare, diapers, miscellaneous expenses.  I agree that I now spend less on myself but I wasn’t big on clothes, purses or whatever for myself anyway.  Diapers and wipes are our main must have expense but to be honest I’m always buying something for our two under two.  Toys, clothes, organization stuff so add miscellaneous spending.

Post # 12
Hostess
4152 posts
Honey bee
  • Wedding: November 2016

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@stephy1872:  We don’t have quite your salary or your savings, but yes, this is definitely something we’ve been considering for a long time, and the main reason why we’ve waited a long time to TTC.  We’re also planning to start this fall, so hopefully I’ll see you on the POAS boards!  We’re also in a very HCOL city, where daycare is over 2k a month for a newborn, so to “practice” paying that expense, we redid our budget and made sure that we could save at least $2500 a month to accomodate for that increased expense.  Since we also have six figures of student loans, we’ve always been decent about budgeting to try to pay them off, which I know will slow down once we have a baby. 

I think even in a HCOL city with your savings and your D.H.’s salary, you should be pretty comfortable.  Perhaps look into daycare costs, average monthly costs, and the cost of medical care that you could potentially have to pay for, audit a month or two of spending to see where you end up, and go from there.  That is how we started and I felt a lot more comfortable seeing the numbers and what we could cut back on to make more room in our budget. 

Post # 13
Member
1016 posts
Bumble bee
  • Wedding: August 2019

I can’t edit, but I did want to add that while you can’t ever account for some things (like, I plan to breastfeed and will do everything humanly possible to make it work, but there’s always that small chance I won’t be able to, in which case we’d have to pay for formula, or you could have a baby with some health concerns), you CAN plan for some things to make it cheaper. Babies don’t care if they’re in an Ikea crib or a Pottery Barn crib. The Chicco Keyfit is far cheaper than the Uppababy or Nuna carseats, yet the crash safety ratings are on par or better. It’s not for everyone, but we plan to cloth diaper as much as we can, so outside of start up costs, will only use disposables for travel, which will save A LOT (especially over multiple kids). Fancy bassinets cost $200+ and can be used for 3-5 months, whereas you can get a mini crib and nice mattress for like, $175 and it’ll carry you through the 6-12 months of AAP recommended room sharing. The list goes on, and those savings add up, and can hopefully offset some of the expenses you can’t control. 

Post # 14
Member
1336 posts
Bumble bee
  • Wedding: June 2016

Our household income is about the same as yours and we live in a HCOL city. We have always had a budget with specific amounts allocated to major expenses and saving buckets each month. When I got pregnant we immediately started putting the cost of daycare into a separate account that was used to furnish the nursery, pay for babymoon, pay for first ~3 months of baby needs (cloth diapers, clothes, toys, stroller, play gym, bouncer, etc). We didn’t do a baby shower so we bought everything we needed.

Even after all of that, we had a good chunk of cash left over in that account afterwards which was good because we used that to pay the cost difference for a nanny when COVID prevented us from sending LO to daycare as planned.

While we have reduced our spending in some areas, I haven’t found that having a baby has made a noticeable difference in lifestyle (it’s just drastically changed our life lol). Childcare is really the major cost difference and we’ve basically dont a small haircut across spending categories + reduced some lower priority savings allocations to cover it. The rest of his expenses have been minor enough (after the initial outlay) that it’s maybe a couple hundred a month so pretty easy to absorb without noticing a difference in our day-to-day. 

 

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