Budgeting For Your Baby

Congratulations! You've successfully reproduced! Now the fun starts! When people call having a baby a life-changing experience, it's kind of like saying World War II was a spirited disagreement between differently-thinking parties.

With a new little one in your lives, get ready for a lot of changes, and we're not just talking about diapers here. For starters, there are changes to your schedule, particularly when it comes to sleep. And remember how you and your spouse were the center of your very own little universe? The baby now occupies that spot. Of course, a baby also means that your priorities change.

But a huge change that really needs to be addressed is the change to your budget and finances. Shakespeare may have told us that two may live as cheaply as one, but the Bard makes no such guarantees about three.

Congratulations! It's a budget drain!

Change Your Expenses
We learn from "Here Comes Baby: How to Financially Prepare for Your Newest Family Member" that it takes almost a quarter of a million dollars to raise a child today from birth to the age of 18. That averages out to almost $14,000 a year, though clearly there are certain stages of life that are less expensive than others.

Anyways, the first step is to change that old budget to reflect the routine expenses of a new baby, such as formula and food, diapers and the numerous products that go along with them, and even things like toys and baby furniture. Oh and don't forget a good car seat!

Do you have health insurance at work? You better update it to include your baby, and then brace yourself for a bump in insurance premiums!

Don't Forget Special Occasions
With a baby around, the financial outlay increases during events like holidays (thinking here of Christmas in particular), not to mention the baby's birthday. When you create a budget, make sure you factor in those special expenses that come once a year. Speaking of birthdays, here are some first birthday ideas for families on a budget.

Start Saving For The Future
Do you want your baby to attend college? If so, you might want to start putting aside money now. Otherwise, your child (and usually you as well) will be at the mercy of the hideous student loan providers out there.
Budget a fixed amount for savings. Also, many banks have college fund programs available. It might be a good idea to take advantage of one.

But Don't Forget The Two Of You!
Someone on my wife's side of the family once said "When you have kids, all you can have are kids!". It sure seems that way, doesn't it? The harried, tired parents sit back and watch their childless friends go off on vacations or purchase nice things, while they themselves are buried alive in a pile of diapers, empty formula bottles, and hideously cute toys. Doesn't that sound like fun?

That's why it's absolutely imperative to set aside a little rainy day fund for the purposes of doing something nice just for the two of you. Toss a $20 or $10 bill into a hiding place every pay period, then once you are both at your wits' end, take the money and do something fun. Whether it's purchasing what could loosely be described as a luxury item, or a night on the town (with enough money for a babysitter!), it's important for your morale and mental health to do treat yourselves to a small indulgence, and with a little imagination and resourcefulness, it can be done at minimal cost.

It Gets Better Budgeting for a baby, when you get right down to it, means being aware of all the expenses associated with a child, and fitting them into your budget, then making cuts and adjustments as needed. But eventually, they DO grow up and leave home, and before you know it, they are the one buying YOU a nice dinner or a few drinks!

photo credit: Maria Eduarda - What? / Como é? CC 2.0