Financial Planning for Expecting Parents
As you eagerly await the arrival of your little bundle of joy, your heart swells with love and excitement—all while your wallet trembles in fear. Here’s the skinny: parenthood is a thrilling adventure, filled with amazing moments. But kids cost money! And the financial responsibilities that come with having a baby can leave even the most seasoned budgeter feeling a little queasy. Don’t worry, though. With a pinch of planning and some easy financial strategies, you can turn a parent money mayhem into a smooth family ride.
Take a Look at Your Money
Before building a complex budget or investing in financial programs, take a look at where your money is going. Start by reviewing your income, expenses, assets, and liabilities. It’s very helpful to see where you have money coming in—and where you have money going out. Write a simple list of your monthly expenses—including rent, transportation, groceries, and utilities. This will be your roadmap, giving you a clearer picture of where you are in your financial journey, where you want to go, and where those areas are where you can cut costs.
We highly recommend using financial apps or budgeting tools like Credit Karma [CG1] or YNAB (You Need a Budget)[CG2] to help track your spending habits. These apps could make managing your money even fun! (maybe).
Create a Budget That Works for Your Family
Okay, you wrote down your income and expenses, and you downloaded the app. Now it’s time to create a budget that accommodates your growing family. If the word “budget” gave you the heebie-jeebies—you are not alone. Many people were not in a family that had a budget, let alone taught how to make one. So let us help.
Creating a good budget should reflect your priorities, including doctor visits, baby supplies, and any childcare costs. When creating your budget, use the 50/30/20 [CG3] rule: 50% of your income goes to needs (housing, food, electricity), 30% goes to wants (dining out, movies), and 20% goes to savings or debts. This type of budget is flexible enough to make sure you can afford a roof and food—but also gives you space for doing fun things once-in-a-while. Remember that just like every family is unique, so is every family budget. Your budget may be different than your friend’s or family’s budget. And that’s fine. Make a budget that works for you and your family.
Build an Emergency Fund
Based off personal experiences, having a baby can come with unexpected expenses: from medical bills to last-minute baby needs. Building an emergency fund is crucial during this time. Your goal is to save at least three to six months’ worth of living expenses. This fund can help you sleep better at night (until the baby wakes you up). This emergency fund can also help you withstand unexpected financial challenges without destroying your unique budget.
To kickstart your emergency fund, set up automatic transfers from your checking account to your savings account. It doesn’t have to be large amounts. Even small contributions can add up over time, making it easier to build your financial safety net before your little one arrives.
Attack Debt and Change Spending Habits
Here is where the financial strategy gets tough. Before the baby comes, it’s time to be ruthless about debt and start making some changes in your spending. It’s not easy, but you will be thankful you did. Attack your debt by making a list of everything you owe money on—including credit cards, student loans, and any personal loans. Line up the total amount owed and the interest rates associated with each debt.
You can hack into your debts by using “the snowball method”: pay off your smallest debts first while making minimum payments on larger debts. This approach can provide quick wins, boosting your motivation as you see debts disappear. If you feel like stretching, “the avalanche method” targets debts with the highest interest rates first, potentially saving you more in interest payments over time.
While chopping at your debts, now is the time to evaluate your spending habits. Are there subscriptions you can cancel or luxuries you can temporarily forgo? Proverbs 21:5 states, “The plans of the diligent lead to profit as surely as haste leads to poverty.” Being a parent is a wonderful, awesome job. But it takes responsibility. And part of that maturity is getting spending under control. If you have bad spending habits, work on them, before the baby arrives. Trust us—it will be worth it.
Explore Benefits and Assistance Programs
As a new mom or dad, take some time to explore any available benefits and assistance programs that can help you with the financial pressures of parenting. Many employers offer maternity and paternity leave, which can provide a temporary income while you settle into mommy or daddy duty. Additionally, government programs such as WIC (Women, Infants, and Children) and Medicaid can offer support for low-income families.
Research local resources and community organizations, such as Caring Network, that provide services and support for expecting parents. You can find great tips on financial planning, parenting classes, and even baby supplies. These programs will help you navigate this new chapter of life with confidence.
As you get ready for the whirlwind of parenthood, remember that financial planning is not just about spreadsheets and budgets—it’s about creating a loving and secure home for your growing family. With each step towards good money habits, you’re not only investing in diapers and baby clothes, but also in a lifetime of memories, laughter, and joy. Have faith that your diligent planning today will pave the way for a brighter tomorrow. So, gather those adorable onesies, stock up on wipes, and take a deep breath—because with a money know-how, you’re more than ready to welcome your new arrival into a world filled with love and abundance.
Where she goes first determines what will happen next.
A woman facing unexpected pregnancy is often overwhelmed and under-resourced. She may feel alone. When she seeks help, the counsel she encounters can prepare her for abortion. Or it can equip her to choose life.
Caring Network centers are for life. We reach women with free medical information, confidential counsel and a calm, judgment-free environment at their time of crisis. When love leads, then fear recedes. And life can grow.
Help us make a difference … two lives at a time.
References:
[CG1]https://mint.intuit.com/
[CG2]https://www.ynab.com/
[CG3]https://www.nerdwallet.com/article/finance/nerdwallet-budget-calculator
