When I imagined my first pregnancy, I imagined taking it easy, pampering myself, glowing!
For me, the reality was vomiting daily and working full-time (I actually went into work while I was in the early stages of labour!), while my husband worked two jobs to get us out of a financial hole. We had over-leveraged (basically another way of saying we had too much debt) on bad investments in an effort to ‘have it all’ now.
I feel like this financial scenario isn’t all that unique, so I want to share some of the things I’ve learnt along the way.
When planning for a baby, especially with your first, there are so many things to think about: pram, cot, car seat, clothes, baby bag, baby monitor, pump or bottles, dummies, nappies, your own hospital bag – the list goes on! It’s all so exciting, but it can get very expensive, very quickly!
During this time we needed to figure out how to make our money stretch further so we could prepare for our first child. Could we comfortably cover all the costs that come with preparing and caring for a new baby, on one income? We didn’t know. So, we started jotting down a plan.
As a family, we really wanted to enjoy those first few months, and avoid having bills pile up! Considering the financial impact of raising a child, it just made sense to set aside as much as we could. If we didn’t, it probably would have meant an earlier return to work for me, the prospect of childcare, etc.
Now, I am a little unusual – and I am the first to admit it! I enjoy reconciling my bank statements and looking at figures – even if what I’m looking at is kinda scary. I enjoy doing our Business Activity Statements (BAS), the end of financial year and finalising our tax returns. I even enjoy the dreaded ‘B’ word … you know the one, budget! (Personally I prefer to use the term Money Plan.) Like I said, I am a little unusual!
Bearing that in mind, when it came to the final months of my pregnancy, we’d given some thought to how we were going to financially navigate our way through the costs that come with children.
Here are 4 quick tips, for EVERYONE (please don’t stop reading if you think you are terrible with money, hate the ‘B’ word, or aren’t currently planning to have a kid):
1. Agree on priorities
This includes both financial and personal. If you and your partner both decide that one of you staying home for a period of time is important, then you need to work out how to make it possible. For us, it meant my husband working two jobs. For my old boss (and others we know) it meant him staying home with the children, as his wife had greater earning potential.
2. Cut credit
If you tend to overspend, switch to cash and cut up your credit cards (seriously, please, I mean it). If you don’t use credit, you can’t overspend and it can force you to live within your means. It will also save you big bucks on interest over the medium to long term.
3. Create a budget or plan
When you and your partner create a plan for your money – and both stick to it – things just feel more predictable and it will honestly feel as if your money goes further.
4. Forget about the Joneses
There are so many beautiful baby and children’s products out there, but there are also amazing deals, second-hand items and no frills options. It’s about balance. Once you’ve agreed on your priorities and created a plan with your partner, keep to it and try to avoid comparing! It might mean those $50 rompers don’t make your shopping list, but it will also mean debt isn’t causing you to lose any more sleep! As a new parent, you need all the sleep you can possibly get.
Over the next few articles I am going to unpack these ideas further…
x – Karen