Jon White is not only talking the talk, he’s walking the walk. It’s so exciting to think that he and his wife Lisa are welcoming their first child into a financially healthy home. For many families, the onset of children exposes cracks in the financial foundation. If nothing else, these three simple ways to prepare for baby will get your wheels turning. ~D.S.
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My wife Lisa and I welcomed our first child into the world on July 10th. Joshua Daniel has been a tremendous blessing in our lives. Besides not getting a whole lot of sleep, things are coming along great. Everybody says that having children is a huge financial burden. While there are some financial adjustments that need to be made, if you plan ahead accordingly and stay under control, they are very manageable. Below are three lessons my wife and I learned as we prepared financially for our baby’s life on the outside.
Pile up cash during the pregnancy
Yes, getting out of debt is nice, but during a pregnancy there’s no greater feeling than having a nice pile of cash saved in the bank in case of emergency. My wife and I already had about 4 months worth of expenses saved in our emergency fund when we found out we were pregnant. Yet we still cut back on our 401(K) contributions and stopped paying extra on our mortgage each month.
Sure, it pained me to make the minimum mortgage payment and watch my projected amortization schedule increase by a few months. But there was nothing better than that feeling of security our emergency fund provided. We also had more than our annual deductible in our Health Savings Account (HSA). This allowed us to enjoy the pregnancy and not worry instead about how we were going to pay for the baby.
Stick to your budget on baby “stuff”
When I talk about baby “stuff” I’m not talking about health needs. I am referring to everything that’s in a Babies “R” Us store. Lisa and I created a list of needs and wants. Now, granted, men and women have different feelings on this. When women find out they’re pregnant, they meet with other women and talk about baby outfits, toys, accessories, etc. But when men find out their wives are pregnant they think of one thing: DOLLAR SIGNS! Because of our needs and wants list my wife and I were both on the same page with this.
If you’ve never been into a Babies “R” Us store, prepare to be intimidated! After our first walk-through, we both left with our eyes glazed over. You can easily spend some money in that store if you aren’t careful, but remember you can still be a great parent without buying one of everything. Know your limits, then stick to them.
Have health insurance
This might seem obvious, but a lot of people don’t think they can afford health insurance if their employer doesn’t provide for it. This includes the self-employed and the unemployed. The monthly premiums might hurt, but you really can’t afford not to have health insurance, especially during a pregnancy. We are starting to get some of the bills in the mail already and that total amount will be well over $15,000. Thankfully, we have health insurance with an HSA policy and have more than met our decidable.
It’s also important to make sure you have the right kind of insurance. If you have choices through your employer, run the numbers and see what would be best for your situation. For us we found the HSA with its high deductible but lower monthly premiums was the best for us.
So, that’s what we did to prepare financially during a pregnancy. If you are thinking of having children, but are not quite sure if you can afford it, it’s important to realize that children are not that expensive as long as you plan accordingly. Remember you have nine months to get ready; your child’s birth shouldn’t sneak up on you.
If you have had a child, what are some other things that you did or did not do to prepare for the birth of your child?
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Jon White is the owner of JW’s Financial Coaching. He enjoys giving people hope with their finances by giving them a new perspective on their money and by teaching them to focus on their economy. Jon also is the host of the JW’s Financial Coaching Podcast devoted to answering listeners’ questions on personal finance as well as cover current events in the personal finance world. For fun Jon enjoys taking walks with his wife and watching college football. You can interact with Jon on Twitter or on Facebook.