If you’re reading this, you are either pregnant, trying to conceive, considering foster care, or trying to adopt. Either way, as expecting parents, you need to prepare financially for parenthood. Why am I qualified to write this? I’ll give you a bit of my personal history.
I’m a full-time budget operations professional at a Boston-area nonprofit research institution. In the past, I was a financial journalist in NYC, and a grants manager at Harvard. I’m also a partner to a software engineer and a mom to boy-girl twins. In the summer of 2019, we moved from a condo to a single family home. That proved to be a big learning curve for me for four reasons:
- I used to drive and now I take a commuter train
- Our home has much more maintenance costs, which are unpredictable.
- Our nanny gave her notice so we enrolled in daycare.
- Our budget is totally different and the property needs more care.
- At 32, I left NYC and my career in journalism. I moved back to Boston and eventually found an apartment, applied to graduate school and ultimately completed an evening MBA while working full-time.
- By 35, I had completed my MBA, and was living alone in a beautiful 1-bedroom apartment in Cambridge. I was working at Harvard and looking for a new job.
- I had accepted that maybe I wouldn’t meet anyone but even if I were alone indefinitely, I knew I wanted to be a parent. My plan was to get a new job so I could make enough money to eventually pay for daycare by myself. I planned to adopt a child myself, if I couldn’t meet anyone and try for a biological child.
The Path to Parenthood is Uncertain.
Well, I met my now husband before I turned 36 and I was married at 37, two years after we met. We tried to conceive naturally, but it didn’t work. Because I was over 35, I was eligible for a fertility referral after six months. It took us about two years to conceive and get to a successful pregnancy. I did three rounds of IUI, one IVF retrieval and implantation, and one frozen transfer. Again because of my age, we agreed to implant two embryos when we pursued a frozen transfer. One day I went to see the wonderful ultrasound technicians and saw two black bubbles. I knew before my husband did — twins.
Long story short, our twins were born early. We had less time to prepare than we expected because I had premature rupture of membrane — aka my son’s water broke and he was Baby A. I went to the hospital and almost made it a week before I labored thru the night without knowing I was in real labor! A wonderful team of nurses, respiratory therapists and doctors cared for our children for the seven weeks they were in the hospital. We were also supported by occupational therapists and lactation consultants, as well as social workers and visiting nurses.
NICU trauma aside, the point is — you never have as much time to prepare as you expect. Also remember your hormones are all over the place and in my opinion, the postnatal care for women in America is lacking, to say the least. So whatever you think you’ll get done when you get home with baby — dial it back. You will be tired, frustrated, emotional, and more.
In my opinion, the second trimester is the best time to be productive. In the first trimester, you are nervous and cautious, likely nauseous too. In the third trimester, you are uncomfortable and likely not sleeping well. The second trimester is the best!
If you’re anything like me, you are overwhelmed by most things at this point. I was most frustrated by a baby registry. Ultimately I delegated it to my sister. For some reason, it drove me nuts. There’s a lot of information out there and really all you need are the basics for the first few months. Keep it simple.
Coming Home from the Hospital. What you NEED.
- Crib or Bassinet or Pack-and-Play. You don’t need all of these at once. While I understand the urge to nest and decorate the baby’s room — assuming you have space — you can buy the crib later. To start, you want the baby close to you in something that’s easy to reach and obviously safe. We kept the twins in one crib, in our bedroom, for the first six months. If you have a single baby, you could start with a bassinet and get a crib later. Just remember you’ll have to get a mattress for the crib and a few pairs of sheets.
- Bottle Drying Rack. Even if you expect to breastfeed, remember your partner or family member may want to feed the baby too. That will also allow you to rest more and share feeding times. Since we had twins who needed feeds every three hours, we had two drying racks.
- Backup Diapers and Wipes. Some people start buying diapers as soon as they are in the second trimester. I like this idea from a budget perspective because it spreads out the cost and helps you build a stockpile. The same is true for the next item.
- Backup Formula & a Formula Pitcher. Even if you expect to breastfeed, it’s good to have formula as a backup. We supplemented my milk with formula to add calories. To prevent prep time in the middle of the night, consider a formula pitcher. I had the Dr. Brown’s pitcher and I mixed my breastmilk with formula in a big batch. Then when the baby is hungry, you grab a bottle from the rack, pour, warm and go.
- Health Insurance. Remember that your health insurance should provide a lactation consultant if you need it. A baby not latching is not your fault. It could be the baby, stress, or even tongue or lip tie. Given that most babies lose a little weight when they come home, you want to make sure they get enough food. You’ll know they aren’t if they don’t have three or more wet diapers in a 24-hour period.
- Community, Possibly a Therapist. You can’t do this alone. You either need friends or family nearby, an online moms group, and possibly a therapist. Don’t wait too long to seek behavioral health if you feel off mentally. Your insurance should cover a therapist and if you need a referral, call your PCP or OBGYN. This is very important. It’s worth the time and the co-pay spend.
- Easy Meals. Your budget will change a lot with baby. Prepare by freezing meals, stockpiling soup and freezer food, and saying yes when people offer to bring something. When people ask what they can do, you can suggest something concrete. I didn’t do this and I should have. They can bring a meal, hold the baby, buy diapers, load the dishwasher. I did those things and so can your family and friends. If they don’t have the money, they can watch the baby while you take an hour nap.
Coming Home from the Hospital. What you do NOT need.
- Bottle Warmer. We had one and it took too long to use. It’s a waste of money in my opinion. We warmed bottles in the little hospital water pitchers.
- Newborn clothes. Most babies are born weighing at least 6-7 pounds. Assuming all goes well, they won’t need newborn clothes. Go right to 0-3 and even those shouldn’t last too long, if he/she is eating well.
- Socks/Shoes. Baby isn’t going anywhere at 0-3 months in my opinion. And if they are, they’ll be in sleeper pajamas and a snow bunting suit, and then right to the car. Don’t get sucked into unnecessary expenses in the beginning, like socks, shoes, bows for a girl, etc. Also consider buying used on Poshmark.
- Crib Bumpers. I never used these. I was too paranoid to use early on and then later I felt like, what’s the point? Why do I need them. The safest way to keep a crib is just a mattress, mattress pad and a fitted sheet, all that meet safety guidelines. You may see staged Instagram photos of people’s pretty nurseries but don’t pay attention. Safety and the basics are what matters in the early months.
Before I went into premature labor, I expected to have a will, a healthcare proxy and 529s set up. That didn’t happen until COVID hit and I panicked. So two years later is better than never, but it’s another sign that we need to prioritize and delegate.
- 529 or Custodial Account. (Separate post in the future)
- You can start a 529 account before you have a child. If you do, even a small amount will show you the power of compounded interest.
- Others prefer a custodial account such as an UTMA/UGMA because it is more flexible. Some folks are uncertain of what college will look like in 15-20 years and hence don’t want their money locked up in a 529.
- Term Life Insurance
- You need more than your employer-sponsored life insurance.
- You should research term-life policies, NOT whole life policies. The idea is your retirement should kick in when the term is over (20-40 years).
- The earlier you do it, the better. Also best to do it before you consider going on new medicines, especially anti-depressants.
- For dollar amount, consider what you’d need to cover costs if one spouse unexpectedly dies. That could be:
- Any outstanding debt: mortgage, car, credit cards, HELOC, student loans, small business loans, etc.
- Childcare: Babysitters, nanny or daycare, after school programs, extracurricular classes, and summer camp.
- Higher Education: Do you want to pay part or all of your kids’ planned college or other education expenses?
- Will, Trust, Power of Attorney.
- These are more depressing topics but it’s important to consider. Take on only one at a time.
- You should have a will so your estate doesn’t end up in the hands of the law.
- You should assign guardians to care for your children if you both pass before they are adults.
- Power of Attorney is necessary if you both pass because someone needs to handle your estate. Examples:
- Sell your home
- Pay off loans
- Provide funds from your estate to help the guardian care for your kids.
In addition to the aforementioned items to think about, remember you need to be saving for your retirement as well.
If this is overwhelming, ping me at andrea (at) budgetreboot.com. I’m available for coaching whether you are trying to conceive, or planning to buy a new home. Every life stage is different and requires a different budget. You are doing great just by educating yourself and taking care of yourself. Keep on keeping on.