As more of my friends, neighbors, and colleagues are anticipating the arrival of their child, I’ve noticed an element that is missing from our conversations of decorating the nursery, picking out a safe car seat, and choosing a baby shower theme — the bundle of expenses that accompanies a new bundle of joy.
I’ll admit that it’s very easy to get wrapped up in all of the wonderful feelings that can come from planning for the arrival of a baby, but trying to keep the finances on track while caring for a newborn has the potential for disaster. Before you purchase that convertible crib for junior’s room, here are a few things to consider:
Does your household currently have a budget in place? If not, now is a good time to create one. Implement a budget that you will use now and after your baby arrives. Be sure to include costs for things like diapers, formula, clothing, child care, and any other foreseeable expenses. Also, if you or your spouse plans to take time off from work after your child’s birth, be sure to factor in any loss of income.
Maternity and/or Paternity Leave
If you or your spouse will be taking time off from work to care for your newborn, you’ll want to make arrangements with your employer at least three months in advance of your baby’s estimated delivery date. This will allow you to finalize projects and make plans for how your projects will be completed while you are gone, perhaps by having a team member serve as back-up or having your employer hire a temporary employee. More importantly, be sure to sign up for disability insurance. If your employer doesn’t offer it, you may be able to get it independently. This can help with income when you are no longer receiving a paycheck during your time away from work.
Check your current life insurance policies and update it, if necessary. If you don’t already have life insurance, now would be a good time to shop for a policy.
Evaluate Baby Purchases
Before you blow your budget buying all of the adorable items the baby store is offering, try to evaluate what your child will actually need and if the price fits your budget. The USDA’s Center for Nutrition Policy and Promotion’s Cost of Raising a Child Calculator is a great resource to help you figure out your overall costs based on where you live, how many children you have, the age of the children, your marital status, and your household income.
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