Even though we have only been expecting for a little over 3 months, we started planning for our family years ago. It doesn’t take a lot of research to know kids are expensive. Between insurance and child care alone it will cost us around $1,400 a month.
Just the thought of coming up with that amount of money got my mind swirling. We both wanted to start a family eventually so we decided to take control of our situation.
The Motivation
3 years ago, we did an exercise from a book called Smart Couples Finish Rich, when comparing our results we found out we shared two very important values: Family and Security.
Since we had about a -$230,000 Net Worth, and were saving next to nothing, we were barely able to keep ourselves afloat financially. Taking care of a baby would have required drastic changes to our lifestyle. We would have struggled to pay for health insurance and child care.
We both come from tight knit families and wanted to have one of our own. In order to start our Family, we felt Security had to come first. Money plays a huge role in security, at a very basic level it puts a roof over your head and food on your table. Our view of security went much deeper, we wanted to be able to comfortably cover any costs and still save for our future.
After Security and Family – Freedom was the ultimate target. We didn’t want to sacrifice our future freedom by not being able to save for our (hopefully) early retirement. Eventually our children will grow up, move out and start their own families. We don’t want to start saving for our future when our kids gone (if you can’t tell I am a planner).
For the rest of this post – head over to The Practical Saver
I think it’s great you guys planned ahead for starting your family. We just dove right in without a second thought (or plan)! I really like the idea of reading the book and doing the exercises to compare results with your partner (in fact, I mention it in a post I have coming up in a couple of weeks!).
Its a pretty good book, definetely learned a lot going through the process. Thanks for the comment and read!
Really informative post and I’m glad that you guys planned before its too late, even I’m also willing to make my family secure via life insurance, and this post helped me choosing the plans and their benefits, I must say family security and child care is necessary for all the families. The only thing which matters at the end of the day is the happiness of family and its members. Always look after your money.
Keep posting more articles like this.
Have a good day!
Thanks for the comment – totally agree that happiness is all that matters at the end of the day.
Planning is a very good thing, glad you guys got a handle on things now. Think your kid(s) will be just fine.
Take care!
Thank you!
I have never read “Smart Couples Finish Rich” but I did read “The Automatic Millionaire Homeowner” which was also written by David Bach. It was a really good book that shows you how owning a home and getting it paid off can build serious wealth over time.
Anyway, I recently had my first child (he is now 4 months old) and we certainly had to make a few financial adjustments when he came into the family. We are lucky that we do not have to pay for childcare because our work schedules align accordingly. I have found that it is expensive in the beginning because you have to buy a lot of stuff to get ready for the baby (ex: strollers, car seats, bottles, swings, cribs, etc…) however once all of the major purchases are out of the way, a baby really isn’t all that expensive at all. Sure you have to buy a box of diapers here and there, but in all reality it is not nearly as bad as I expected.
As far as the upfront costs, if you are willing to buy used stuff from craigslist (or hand me down stuff from a relative) you can easily save a lot of money! When you start adding up the cost of a crib, stellar(s), car seats, etc, the number starts to get pretty big. Often you can find some of this stuff for free. We did a mixture of getting some stuff for free and buying some stuff new. Our crib we got for free from a neighbor. It was in good shape but my wife thought it was really ugly, so we painted it to match the baby’s room. Works like a charm. Be smart, set a budget, and there shouldn’t be any huge financial surprises when a new baby comes into the family.
Thanks for the comment and insight. We are checking with close friends and family to see what they have and maybe pick up a few things cheap.
Thats awesome that you don’t have to pay child care – it is a huge expense
Everyone says that you just figure things out when a baby comes along. However, why live in that stressful environment? Why add that stress to a new situation? That is great you took the time to save, and prepare yourself. You are setting you, your partner, and future child up for a successful future. 🙂
Also, congrats on expecting!
Nice post and planning AE, you sound like you’ll make great parents 🙂
Tristan