Money and Planning for a family! How did/will you approach it?

bmo88 · July 2015

DH and I are about 1 1/2 years away from TTC. So we have time, but we are aligning our current financial goals with starting a family. So we are making budget decisions and long term investment decisions based on where we want to be financially when we have a child. I am curious how other people have or will approach this given that having children can be a very costly expense. So please share!

Personally, we have done some research on what to expect as far as costs go. We know adding a child to our health insurance will cost at least $400 a month (eek), that the average rate of full time child care in our area is $1,200 and have looked at some of the monthly as well as start up costs. While we cannot 100% predict the actual costs, we estimate our monthly expenses will go up by about $2,000 for the first year.

Currently, we are working on paying off $48,000 in debt (from student loans, a car and our 2nd mortgage). We are paying $2,000 a month so that it will be gone in under just two years and before a child would be born. Therefore, we will replace our debt payment with child expenses.

Fortunately, our current set up still allows us to put 15% in retirement and save $800 a month in general savings. We also plan to have 6 months emergency expenses (currently have 4 months) and $5,000 cash for an initial baby fund.

We have moments where have thought about bumping up our baby timeline, but we are confident and set on our financial plan. If things change, we will address them, but feel this is best for us.

How have you approached your family planning from a financial stand point?

blondie42107 · July 2015

We planned but didn't stress. We knew what our family out of pocket max would be for health insurance so we had that saved. (Baby has it's own deductible and OOPM). We didn't decide on our daycare until after our first was born (I took about 10 weeks leave). Also planned for loss of income after I ran out of benefit time. Diaper and wipes, food, etc we just built into our regular budget for food and personal items. Clothes, baby gear, etc can be as expensive as you make them.

We had debt (SL, auto and mortgage) before we had our first, when we had our second and still have debt. We're fine with that.

als1982 · July 2015

Our goal is to have $100,000 saved for retirement, zero student loan debt and $10,000 saved in cash.

We are also planning for the possibility of me either staying at home, or switching to a job involving less stress and hours but also less pay. If I do end up deciding to stay at home, we are currently able to cover our bills (plus an increase in out of pocket health insurance costs) while still saving $2,000 a month.

Xstatic3333 · July 2015

I'd say we are also planning but not stressing. We've done the research you mentioned, and are super lucky there in many ways. The biggest stroke of luck we have is that our insurance premiums will not increase, since we are already on a "family plan". Said family plan has a very low OOP max of around $1500/year/family, so we'll save that in addition to our e-fund. I'll likely only get a 6-8 week maternity leave, but my job seems to be okay with me banking sick time indefinitely so it should be mostly covered. If not, I am VERY lucky that my state is one of only four that provides a small guaranteed maternity benefit for four weeks to bond with a new baby. It would equal around half of my salary, which is fine. We will have high daycare costs as well, $1,000-$1,200 a month unless I can find an in-home that meets our needs. I feel a little lost about how to go about finding a good in-home since they don't have websites. We may be offered two days of care from my mom, who I trust 100%, but I want to be prepared in case that doesn't pan out.

For supplies and recurring expenses, I'm not too worried about just cash flowing everything. It's no secret if you read my accountability posts that we currently spend a fair bit on optional "fun" activities, and many of these will go way down once we have a new baby, to replaced with a different kind of fun! In the buildup to TTC, however, I really want to build up our cash savings an extra $5,000-$10,000 in case of emergencies such as a NICU stay, a special needs child, or the need for special formula. We aren't starting until January at the earliest, so I think this goal is reasonable. I'm also focusing on getting up my retirement contributions before a huge excuse not to comes along! We will still have SL and car debt once a LO arrives, and are okay with that.

MommyLiberty5013 · July 2015

We didn't plan for our family based on finances. Obviously finances played into it, and we knew they would, but we didn't base TTC on our money. That was our personal choice.

I'm a huge fan of not reinventing the wheel when it comes to baby gear and furniture. Seriously! There's a TON of nice stuff on Craigslist! As long as you aren't buying drop-sided cribs (they are illegal to resell) or stuff out of a smoking home, you are getting a huge deal.

Our average Carter's (Babies R Us Brand) crib and matching changing table cost $700 brand new. Plus, we got a brand new $500 gliding, rocking chair (I was insistent that it didn't look like a nursery rocker so it could be used in future non-infant rooms). The crib mattress was $90 new. If I had to do it again, I'd FOR SURE buy the crib and changing table off Craigslist. Probably could have saved $400-$500!

I think the only baby gear I would buy new would be the car seat and a breast pump.

AprilZ81 · July 2015

We are also "planning not stressing" as much as we (really just me) can.

I'm not currently working so if we get pregnant soon and I'm not working when the baby is born we won't have child care expenses because I will stay home. If I get a job before then we have a few child care options. One is my sister (we would pay her) because she is a stay at home Mom to three and I know the baby would be in good hands and be exposed to other kids (his/her cousins). If my sister can't/won't do it I would want an in-home day care for the first few years and we estimate that would be about $150 a week.

My sister had twins 2 1/2 years ago so she has multiples of a lot of baby gear. I plan on getting a lot of gently used stuff where possible and try to keep the "extra" stuff to a minimum. This will be the first grandchild on DH's side (plus he is an only child) so I'm sure his parents will spoil the baby rotten. My parents will too but not as much as his I would imagine.

I'm banking on having to formula feed due to having a breast reduction 7 years ago. The surgeon said that breast feeding was a possibility but not a guarantee so I'm planning for worst case scenario.

We already have enough in savings to cover delivery costs and prenatal care as well as establish the nursery.

The only debt we have is our mortgage and HELOC and while the payments are affordable I'm starting to get the "itch" to start paying down the HELOC with any extra money that comes in. Eliminating the HELOC will free up $250/month (we are overpaying by about $120 each month) and give us more wiggle room if I don't work after the baby is born.

Frugalmama2009 · July 2015

I'm in Canada so no health premiums/payments. The only thing I have to add is things kind of balanced out in that we couldn't go out as much. I would estimate we spent an extra 500 a month in the early years. We spent it on part time daycare. Otherwise, her diapers/formula levelled out against less bar tabs/entertainment for us:) Mom swaps/Facebook groups are great for deals on stuff too!

bmo88 · July 2015

MommyLiberty5013 said:

We didn't plan for our family based on finances. Obviously finances played into it, and we knew they would, but we didn't base TTC on our money. That was our personal choice.
I'm a huge fan of not reinventing the wheel when it comes to baby gear and furniture. Seriously! There's a TON of nice stuff on Craigslist! As long as you aren't buying drop-sided cribs (they are illegal to resell) or stuff out of a smoking home, you are getting a huge deal.
Our average Carter's (Babies R Us Brand) crib and matching changing table cost $700 brand new. Plus, we got a brand new $500 gliding, rocking chair (I was insistent that it didn't look like a nursery rocker so it could be used in future non-infant rooms). The crib mattress was $90 new. If I had to do it again, I'd FOR SURE buy the crib and changing table off Craigslist. Probably could have saved $400-$500!
I think the only baby gear I would buy new would be the car seat and a breast pump.

Oh absolutely! The start up fund is actually just to cover our out of pocket health care max, which is $4,500. I shop at thrift stores now, craiglist and buy lots of things second hand. We have family members who have hand me downs they are willing to provide as well.

vlagrl29 · July 2015

We didn't plan our baby based on finances. We were actually planning on having her later but decided quickly to go ahead and TTC while I was on COBRA and had maternity benefits - so I guess in that sense it was based on $$. During pregnancy DH saved just enough money for the medical expenses and baby items that were a must not a need. I don't think babies cost that much.

Now we are waiting for DH to finish building his studio which will hopefully be done Jan/Feb of 2016 and then we will TTC. With this one we will be a bit better off financially - actually have a savings now. This will be our last baby unless I have a great pregnancy and delivery and then I may want another

bcarb · July 2015

I am due in 12 days. We didn't base TTC on finances, Obviously it had some role, but I def didnt/still not stressing out about it. I didnt want to put TTC on hold until we were debt free or this or that--because honestly who knew how long it was going to take to actually get prego. One thing I did do was bank most of my annual and sick leave (that is how we get paid for maternity leave, we dont have ST disability or anything like that). I am taking 12 weeks ALL PAID IN FULL for the whole 12 weeks. H will have to miss a week of work due to no time off, but not concerned at all. Our Insurance will not go up and will only have to pay the $175 co pay when we get admitted. We are already paying for a family plan for me and H. Becuase this is our first, we got a ton of stuff at our baby shower and had a diaper party(we wont have to buy diapers for AT LEAST a year). We shopped lots of sales/yard sales for clothes and stuff. Childcare will be the most expensive expense, but even then, we are doing in home and will only cost $140 a week.

Also, we got our nursery furniture from IKEA, seriously super cheap and good quaility. All together our nursery furniture (crib, dresser, rocking chair) was MAYBE about $400 bucks and the dresser can be used over and over...Babies can be as cheap as you want them or as expensive as you want them... all depends.

CuriousKiddosMama · July 2015

I am one of those who believe that babies are only as expensive as you make them. Garage sales are great resources for baby items. Just make sure to check recalls to make sure the product is safe yet. We bought a ton of stuff at consignment sales, and off Facebook garage sale pages too.
Our crib was super cheap on clearance at target. I coupon for diapers so I get them at a fraction of retail. Formula is a huge expense of you go that way, the best deals I could find on that was SAMs club.
I guess all of this to say don't stress too much if it happens before or after your timeline, kids fit into the budget. And they don't care if their cute outfit was .25 at a garage sale or $10 at the store

formerlyGDaisy09 · July 2015

We had some financial goals that played into us feeling ready to TTC, but I wouldn't say that our decision was purely financial.

I think owning our home, and safe cars played into us feeling ready. We paid off H's CC debt, which helped a lot, and got ourselves to a point where we could make our budget work with H just working one job.

We figured we had enough wiggle room in our budget to handle changes in insurance premiums, and the daily/weekly/monthly costs of raising a child. I didn't do too much hard math there, but based on some disscussions on this board figured we have enough room to make it work. deciding to TTC was a much more emotionally driven decision for us, we both got to a point where we felt emotionally reaady and like it was the next step for our family. We did have the discussions about cost, and did delay a little bit to figure out expanding our home a little.

We could definitly be in better finanical shape, figuring out child care is a current source of stress for me. most the daycare centers in the area aren't willing to work with us for part-time child care, so that piece is seeming a bit more expensive than we were thinking it might be. but I'm working to find alternatives there....hoping we can find something that will cost us about $100-150 a week (we need 8-16 hours of coverage a week).

brij2006 · July 2015

Our situation ended up a bit different than most, and definitely different than we "planned."

Originally we had $10,000 put aside into a baby fund when we started TTC. I was diagnosed with PCOS just a few months into TTC, and we started testing and treatment. Between testing, 1 round of treatment, a miscarriage, and all the expenses associated with it all. Our baby fund had $1,000 left in it, and we decided to stop TTC for a few months.

When we started TTC again, we actually had a $1,000 emergency fund, and was full blown into debt payoff mode. We got pregnant 6 months into our plan to get out of debt. At that point we stopped putting our extra money toward debt, and instead put it aside to build up a big pile of cash before baby arrived. When we had our daughter, we had $25,000 in savings. We paid the hospital bills (with a paid in full/cash discount) of $5,500 (deductible and OOP from insurance), then the remaining $19,500 went toward debt after the medical bills were paid and everything was fine with her and my health.

For monthly expenses, we have $500 for daycare (SAHM who watches her), $235 for health insurance, and $100 for miscellaneous. I cloth diaper (spent about $350 to get enough), and also breastfeed. My pump was covered by insurance, and I spend about $30/month on bags to freeze the milk in for daycare.

As far as the expenses for things you "need" for baby. Everything but her car seat and stroller were 2nd hand. I bought her crib for $25, used (researched to make sure it met all the specifications needed), changing table for $25, rocking chair was from a relative who no longer needed it, and bookcase was repurposed from a different room. We also didn't find out the sex of what we were having, and it quite honestly helped keep me in check with spending. I wasn't going out and buying a bunch of cute clothes that I really didn't need. We had the staple items in a neutral color, and when she got here, many people bought clothes for her. Since then, I've only bought from garage sales or swap pages, and keep grandparents informed on what size and what she needs (they love shopping for her).

The most expensive part, for us, has been car seats. She is insanely tall, so we've already bought 2 convertible car seats (she's 5 months old). Those cost us about $300 each. Her infant seat with the stroller combo cost $300.

Honestly, I'm a big advocate for TTC whenever you're ready. If we all waited until things were perfect in our lives, to have children, we never would. And we were those people with fertility issues and said we just wouldn't prevent while focusing on paying off debt. Our goal was to get all of our debt paid off, so we could finally afford to pay for the treatment we needed to get pregnant. We were fortunate that things worked out differently, but it definitely wasn't in our plan to have a child before all of our debt was paid off.

simplyelise · July 2015

H and I have a timeline in mind for TTC (probably start at 2 year anniversary, dependent on feelings then). I don't think we would have changed any TTC plans based on finances, unless the financial situation was very drastic.

But, now that we've got a hopeful timeline of TTC starting 10/2016, we can line up our goals with that. We will be 100% debt free in July 2016. According to our planned savings chart, we will then hit our goal of 15K in our efund by January '17 and then we will start saving for a downpayment. We don't plan to buy until summer 2018, so if it takes us less than 10 or so months to conceive, we'll have baby before house.

I use $1000/month in my head for daycare, but it will probably be less around here. My insurance is already a family plan to include DH and we have no premiums. My OOP max for in-network is $2000, so saving the initial medical costs will be a breeze. I do need to work on building up sick time. Or we need to save a couple extra months of expenses for maternity leave time.

KatieCutie05 · July 2015

you have this very planned out and you sound like you make a lot of money to be able to do ALL that at once and still get out of debt in 2 years. Unless you want to - don't think you need to have everything perfectly squared away before ttc. Money isn't everything.

So long as you can cover all the health expenses and basic supplies without going into debt and you can afford to feed and clothe your child - i don't think having debt or no savingds should ever stop you from TTC.

What i discovered is simple. God finds a way. I was panicky and i didn't understand it - i thought we couldn't afford daycare. I thought we'd never get out of debt because of it. Nope - it got delayed because we panicked but thats it. And even that one year we lost was worth it. You'll never regret it and you don't know what the future holds. you could lose your job or get a big raise. no one knows. You TTC because you want a baby not because you have a lot of money.

if that were the case - we'd never have kids.

But to be honest - we'll wait to TTC #2 until we're out of debt in 3 years but we don't want to have our kids too close together anyway for other reasons. our debt payoff plan just happens to line up with that.. But I have zero plans to save up a big baby savings before TTC. We'll save up during the 9 months of pregnancy and thats it.

cbee817 · July 2015

For DD#1, my biggest concern was having a house, stable jobs, and savings. We still had SL and a car payment when we were TTC, but our insurance was really good so we paid $0 for prenatal care, delivery, and dr appts for DD#1. We weren't really planning/preventing for DD#2 - DH's car was paid off at that point and his SL were being paid off quickly. We got a lot for DD#1's shower and was able to reuse quite a bit of it for DD#2. Our largest expense has been day care- my mom helped us out 2 days a week for about 3 years, but then had to go back to working full time so we have had 2 kids in day care/full time since September 2013. Our largest yearly total was in 2014 for $19,971.80 for both (more than our yearly mortgage/utilities/cell phone bills combined). YTD 2015 is a little over $12,000 with the yearly total projected to be about $18,000. DD#1 starts kindergarten in the fall, so her after school care is much cheaper. We'll be in really good shape once DD#2 starts kindergarten in 2017 and will probably start to look at larger homes in a better school district at that point.

simplyelise · July 2015

Just wanted to pop in and add that the biggest financial plan we are doing before children is bumping up our life insurance amounts. DH has lost about 20 pounds since we got his 10 year term life and we only got it for 5x his salary. His loans would be cancelled upon death and we don't have any other liabilities, so with the higher rate we had to pay for his health (overweight, high blood pressure), we stuck with 5x salary. Thankfully he's gotten much healthier, so I expect the monthly cost wouldn't go up much to increase the coverage. And woefully, we don't have an extra policy on me, just the employer sponsored one which is 2x salary.

We will definitely each have longer term life insurance policies in place before TTC. We're going to do 10x salary on each of us.

formerlyGDaisy09 · July 2015

simplyelise said:

Just wanted to pop in and add that the biggest financial plan we are doing before children is bumping up our life insurance amounts. DH has lost about 20 pounds since we got his 10 year term life and we only got it for 5x his salary. His loans would be cancelled upon death and we don't have any other liabilities, so with the higher rate we had to pay for his health (overweight, high blood pressure), we stuck with 5x salary. Thankfully he's gotten much healthier, so I expect the monthly cost wouldn't go up much to increase the coverage. And woefully, we don't have an extra policy on me, just the employer sponsored one which is 2x salary.

We will definitely each have longer term life insurance policies in place before TTC. We're going to do 10x salary on each of us.

YES! we did add life insruance through my employer during open enrollment last year I'm covered for 10x my salary and they offer up to $25K coverage for a spouse I think he's covered for 1X his salary (his contracted salary not his actual take-home) at work. We need to shop for more coverage for H, but the $25K would be enough to pay off the car loan and my student loans, with his student loan debt canceled I could "get by" on my salary...not that that's what either of us would want. We do plan to get him covered for at least 5X what he brings home in a year...but may try to get coverage to pay off the mortgage, set-up a decent college fund, and have at least a full year of his salary in savings, in addition to paying off all other liabilities.

bmo88 · July 2015

KatieCutie05 said:

you have this very planned out and you sound like you make a lot of money to be able to do ALL that at once and still get out of debt in 2 years. Unless you want to - don't think you need to have everything perfectly squared away before ttc. Money isn't everything.

So long as you can cover all the health expenses and basic supplies without going into debt and you can afford to feed and clothe your child - i don't think having debt or no savingds should ever stop you from TTC.

What i discovered is simple. God finds a way. I was panicky and i didn't understand it - i thought we couldn't afford daycare. I thought we'd never get out of debt because of it. Nope - it got delayed because we panicked but thats it. And even that one year we lost was worth it. You'll never regret it and you don't know what the future holds. you could lose your job or get a big raise. no one knows. You TTC because you want a baby not because you have a lot of money.

if that were the case - we'd never have kids.

But to be honest - we'll wait to TTC #2 until we're out of debt in 3 years but we don't want to have our kids too close together anyway for other reasons. our debt payoff plan just happens to line up with that.. But I have zero plans to save up a big baby savings before TTC. We'll save up during the 9 months of pregnancy and thats it.

I agree you shouldn't wait until everything is perfect. We are fortunate that we have high paying jobs at the moment. Our income has drastically increased (by about 50% over the past 2 years). So we can work more aggressively toward financial goals. But with the high pay comes risk in that we both work at the same start up company that isn't entirely stable yet. Therefore, we want to eliminate as much debt as possible given that yes, we could both lose our jobs. Could that happen after we have a child, yes. But that's why we are building our emergency savings. Additionally, we are young (27 and 29) and I just started a new job as an Executive Director, which has been very stressful. So it doesn't actually make sense to TTC in the first year of getting myself grounded.

I honestly hate when people assume that because you have financial goals before TTC that they think you are only focused on money. I think people can afford kids at a lot of different income levels but you should be comfortable with your own financial situation.

Our plan isn't to be rich or avoid spending money on a kid. Though we have been very fortunate to earn high incomes now, we also know the risk of losing them is very real. So we are trying our best to mitigate financial risk given there is uncertainty in the next few years.

We have plans and like I said, if they don't work out, we will figure things out. We aren't stressing that much about it, just planning and preparing to the best of our ability.

blondie42107 · July 2015

It took my friend seven years to have their first child. She had some regrets on waiting to TTC.

als1982 · July 2015

blondie42107 said:
It took my friend seven years to have their first child. She had some regrets on waiting to TTC.

So women should have babies early 'just in case?'

I didn't meet my husband until I was in my 30s. Should I have just settled for someone less than perfect for me or had a baby before marriage just so that I could ensure my eggs were still young and my body could conceive easily? No thanks - I'd rather have a great career, financial independence, amazing travel adventures and other once in a lifetime experiences, and a husband who was absolutely worth the wait. If we can't concieve naturally there are a myriad of other options available to expand our family.

@bmo88 Do what's right for you, and no one else.

brij2006 · July 2015

als1982 said:

It took my friend seven years to have their first child. She had some regrets on waiting to TTC.
So women should have babies early 'just in case?' I didn't meet my husband until I was in my 30s. Should I have just settled for someone less than perfect for me or had a baby before marriage just so that I could ensure my eggs were still young and my body could conceive easily? No thanks - I'd rather have a great career, financial independence, amazing travel adventures and other once in a lifetime experiences, and a husband who was absolutely worth the wait. If we can't concieve naturally there are a myriad of other options available to expand our family. @bmo88 Do what's right for you, and no one else.

***SIB****

All of the above. There are so many what if's about waiting, but you don't know until you try. The worst thing you can do is try before you're fully, truly ready. My H and I wanted to TTC right when we got married (we had been together 8 years at that point), but we decided to wait a bit longer for financial reasons. Once we did start trying, I was diagnosed with a fertility issue. 15 months, 2 chemical pregnancies, and 1 miscarriage later, we were finally pregnant with our daughter. Do I regret waiting because we weren't 100% ready both mentally and financially right after our wedding? Nope.

blondie42107 · July 2015

als1982 said:

blondie42107 said:
It took my friend seven years to have their first child. She had some regrets on waiting to TTC.
So women should have babies early 'just in case?'

I didn't meet my husband until I was in my 30s. Should I have just settled for someone less than perfect for me or had a baby before marriage just so that I could ensure my eggs were still young and my body could conceive easily? No thanks - I'd rather have a great career, financial independence, amazing travel adventures and other once in a lifetime experiences, and a husband who was absolutely worth the wait. If we can't concieve naturally there are a myriad of other options available to expand our family.

@bmo88 Do what's right for you, and no one else.

No I'm not saying that. What I said is that it took my friend a long time to get pregnant. She had some regrets about waiting. Her desire to be a mom was more important than some of the things that had on their list of things to do before TTC. It's just another perspective.

vlagrl29 · July 2015

I'm 35 now and feeling the clock ticking so we are going to start TTC early next year because you never know how long it will take - only took 1 month with DD, but I"m older this time so who knows. Do whats best for you - that's what we've done.

strickland8052 · July 2015

I haven't been on here in awhile, but I had some free time today. You sound a lot like me a year ago. Now we are just two months away from TTC!

With two months to go, we have reached our goal of a 9 month e-fund and a decent-sized baby fund to cover any unpaid maternity leave, baby gear, and hospital bills. We estimate that a baby will add about $1500 in expenses to our monthly budget, so once we get pg ,we will "practice" by putting that money every month into the baby's future college fund.

We are in way better shape with all of this than I ever would have imagined. A year ago I really worried that we would never be able to afford a baby and saving for a college fund was just out of the question. Since that time, we have had major unexpected expenses (new roof) but we've also gotten new and better paying jobs so everything worked out in the end. Just keep doing your best and you will be there before you know it!

Best wishes to you on your venture!

Money and Planning for a family! How did/will you approach it?

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