Financial Priorities You Should Line Up Before Having Kids


Kids are expensive; and there is no way around that. It does not matter what you do; kids are expensive. I tell my husband all the time I think that all these women who are looking to give birth in their bathtubs and with midwives rather than doctors are just looking for a way to have more kids for less money, and it’s just not going to work. Sure, it might mean fewer hospital expenses, but that’s not where having a baby is expensive. Okay, it’s not cheap, but insurance does cover most of it, there is very little out-of-pocket expense, and there is virtually no reason that you cannot have a baby in a hospital for next to nothing – but I digress since that is not what we are discussing. Go ahead and have your baby wherever you please, however you please and without worrying about what I think. I had four kids, all in a hospital, all while happily feeling nothing thanks to the magic that is known as epidural – and I’m happy with that.

Kids are expensive. It’s the diapers, the wipes, the formula, the food, the clothes, the shoes, the furniture, the car seats, the accessories, the school functions, the field trips, the education, the stuff. Kids need and require a lot of stuff. I might not be an expert in many things in life, but I’d consider myself an expert in the kids’ stuff department. I have four of them. I have a 7-year-old in the second grade, a daughter who is turning 5 in March and boy/girl twins turning 2 in March. Trust me when I tell you that kids are expensive (and no; the twins were not a buy one, get one special; we paid for and continue to pay for both).

The good news with babies, though, is that you have a bit of notice; about nine months, precisely. Even if you are surprised with baby news you were not expecting, you still have nine months to financially plan for your new arrival. It’s not ideal, I imagine, to find out you are expecting a baby you weren’t expecting to have, but you can make it work. For those of you who plan meticulously for a baby, you have even more time. My husband and I were married for many years before we made the decision to begin our family. We wanted to do a number of things before we had kids; we wanted to travel, we wanted to see the world. We wanted to establish our marriage and our home, our careers and our lifestyle. When we did make the decision to start our family, we did so with the knowledge that we could afford to do it. I could afford to leave my job and stay home. We wanted to be present in the lives of our kids. I also knew that I’d want to go back to work – from home – doing something I love to do, which is writing. For me, planning and strategic thought worked in our favor.

When it was time to have baby number two, we put more thought into it. A second baby meant more money to spend, more clothes to buy, more birthday parties to throw, more Disney annual passes, more strollers and car seats and plane tickets and college and school supplies. When we decided that our third baby was in the plan, we went over our finances yet again. And that third baby was also a reminder that things do not always go as planned and that the unexpected is always something you should expect.

We had no idea going into our ultrasound halfway through our pregnancy to find out whether we’d be adding a third girl or our first boy to the family would result in the news that we’d be adding one of each. We don’t have a family history of twins, I was only 30, and why would God give us two babies the last go round? I mean, really? Well, He did, and we have four kids now. Thankfully, we love them all almost all the time (seriously, we always love them; we just don’t always like them when they make feces artwork or forget to wipe or moments like those).

The point is that we all have plenty of time – at least nine months – to get our finances in order before we have a baby. There is no way we can financially prepare for our entire lives, the unexpected and other instances, but we can plan for a few things that will make a huge difference. We did it pretty well the first time around, but we did it a lot better the second time around since we were old pros by then. Let me tell you how you can financially prepare for a new baby the best way I know how – and boy do I know how after four littles.

Look at Your Health Insurance

When I was having my first child, we had to add maternity insurance to our policy and wait for it to kick in. With the new healthcare rules, that’s not a problem. Pregnancy is something you can add to your plan and not something that is considered a pre-existing condition that medical insurance companies will not cover in the middle. So, there’s that good news for those who are unexpectedly pregnant. For those who are planning on a baby in the near future, you already have insurance. Now is the time to go ahead and read that plan once, twice and again. You need to know what is covered, what is not, how much is covered and how much you might expect to spend out of your own pocket.  We knew that, and we were prepared. However, we learned something hard the first time around.

We got pregnant in October and had our first daughter in July. I was pregnant two calendar years; 2007 and 2008. When we were considering our out-of-pocket expenses for what would hopefully be a standard labor and delivery without complications, we planned for the $2,500 out-of-pocket expense we had to pay the OB during our first visit for her role in our delivery, and we planned for the 20% (give or take a few bucks depending on how labor and delivery actually went) after our daughter was born. Since my OB’s fees more than covered our deductible, we didn’t allot for more in our baby budget. What we did not consider was the fact that we met our deductible in 2007; not 2008. It reset and we had to pay the deductible once more at the hospital, and it increased our fees a bit. It wasn’t terrible since we did have a low deductible plan, but it was a thing.

The second time around, we got pregnant in June and had our baby in March. As a longtime patient of my OB, she was more than willing to forgo charging me her OB fees until December and not cashing my check until January so I met my deductible one time in 2011 just before our daughter was born so we were not in the same situation with meeting it twice. Depending on when you get pregnant and when you are due, you can ask your doctor to do the same, or you can see about planning your pregnancy so that you get pregnant late enough in the year that your first OB appointment isn’t until your due date year or so that you get pregnant and have the baby in the same year.

Additionally, learn to expect the unexpected. We planned for baby number three, ended up with twins halfway through, went into labor a month early and had two babies to pay for in addition to a week in the NICU so they could grow. We didn’t go into that pregnancy assuming we’d end up with two babies, let alone a 3 pound and a 5 pound baby that would need a little more time to develop after being born prematurely. I always had very easy pregnancies; went into labor at 39 weeks, had healthy babies and went home within 36 hours of giving birth. It was just not something we expected.

Work and Finances

Do you have maternity or paternity leave? Do you get paid for it? These are things you need to know. Will you go back to work? Will you stay home with the baby? Will you work part time or use daycare or ask a grandparent to stay with your new baby when you go back to work? You have to plan for the future. You have to do what you can afford, and you have to figure that out long before the baby arrives. A plan needs to be in place. If you are going back to work but you do not get paid leave, can’t leave the baby at daycare until she or he is 6-weeks-old, and you have to find a way to earn money during that time, you have nine months to save. You have to figure this out now.

Consider Future Costs

Now that you’re having a baby, you need to know that you have more than just diapers and wipes and formula to pay for. Additionally, you cannot rely on the fact that you will use the cheapest method. What if you plan on breast feeding for a year so you can eliminate the cost of formula? I planned on breast feeding each of my babies because I wanted to, and I ended up needing to supplement right away. Sadly, my body simply did not produce enough breast milk to adequately feed any of them no matter how hard we tried, what we did and who we worked with. If we’d been planning on affording a baby based on breast milk and no formula, we would have been financially devastated. Thankfully, we weren’t reliant on breast milk to afford our babies.

With one baby, it was expensive. With two; it was astronomical. We spent $125 per week on formula. We didn’t have to buy wipes or diapers almost the first year because we received so many at the beautiful surprise shower our friends and family threw for us, but when we did have to start buying them, we realized just how much it is. They’re almost two now, and it’s far less expensive, but it’s still a lot of money. We are spending $70 per week on diapers and $25 per week on boxes of wipes. Before, we were spending $100 on diapers and $25 on wipes. Along with formula, that was $250 a week on baby items, not counting food or clothing or anything else.

Child Care

Do you have a job that requires you go to work and take your kids to daycare? Consider that cost. We live in Florida, and our middle daughter is in VPK. She goes to school from 9 to noon every day of the week, and I leave her there until four due to her love of school, her desire to stay and also because picking her up at noon means our twins get very little naptime. Our youngest has to be at school at 8:45, our oldest at 9:15 and I don’t get home until 9:30. I’d have to leave at 11:30 to pick up our VPK daughter by noon, come home and then leave by 3:00 to pick up our oldest daughter by 3:30. Since the twins nap for 3-4 hours, I’m not willing to forgo that time as a work-from-home mom. I pay $90 per week for my daughter to stay at school four hours after VPK – which is a program parents do not pay for. If I put the twins in school, too, I’d pay $150 each for them. That would be $390 per week for school.

Can you afford childcare for one, two or more kids? It’s a cost you have to consider.

Pay Down your Debts

If you want to have a baby, have one; don’t let me stop you. However, you need to be sure you’re in a good financial situation outside of baby costs, too. If you have tens of thousands of dollars in debt, you cannot afford a home or a car that’s big enough, or baby items, or even your own daily living expenses, it’s not the time. You need to do what you can do to pay off your debts.

  • Pay off credit card debts
  • Pay off car loans if you can
  • Create an emergency fund

You can do what you want, of course, but to make your life less stressful, this is going to help.

Understand What You Pay For

Sure, you can have a baby and expect to pay for diapers, food, formula, wipes and one day, college. But what about everything else that you have to pay for? Babies require a lot of stuff, from car seats at different ages to games and toys and educational development to school to clothes to shoes and things that they grow out of every time you turn around. For this reason, you need to know what you need to do and what you need to pay for.

  • Clothes
  • Shoes
  • School
  • Car seats
  • Toys
  • Christmas gifts
  • Birthday parties
  • Classroom gifts
  • Teacher gifts
  • Extracurricular activities
  • So much more

Our oldest daughter is currently the only one in ‘real’ school and the only one in extracurricular activities (which will change this year as our middle daughter turns five and begins kindergarten). It costs us $400 per year to enroll our oldest in cheerleading, and it will cost thousands this year since she is leaving Pop Warner and heading to a competitive league. We also pay $75 per month for hour-long gymnastics classes once a week. So far this school year I have paid $100 to sponsor her class, $200 in school supplies on the list her teacher sent home at the back-to-school orientation, $75 on books when we visited her for lunch and took her to the book fair a few weeks ago, $150 donation to her classroom for her teacher to buy books, school supplies for other kids, school supplies to donate, fundraisers, field trip forms and so much more. This school year is only halfway over and we’ve spent well over $700 on just her classroom, and that doesn’t even count her Halloween or Christmas gifts to her friends and teachers.

Kids are quite expensive, and they are not easy to care for in that aspect. We will eventually pay for four kids to play football and cheer and play soccer and go to gymnastics and to go on field trips and to have new back-to-school clothes. We spend thousands at Christmas, and we have birthdays and doctor appointments and dental exams, maybe braces or glasses at some point. The toothfairy came to our house for our oldest daughter three times in December because the kid lost a tooth every time she opened her mouth.

Kids are expensive, and they only continue to become more expensive. So, be prepared to be unprepared; but do what you can in the meantime.

Photo by Getty Images


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