Personal Finance 
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Financial Checklist for New Parents

Baby with an iPodMy wife and I recently had our first child, and to say it has changed our life is an understatement. Raising a child is an amazing responsibility, and it doesn’t stop with feeding and caring for him or her. Somewhere between the late night feedings, diaper changes, and doctors appointments, you will need to take care of an assortment of extra activities to make sure you have our finances in order. There are many things you will need to do when your child arrives and you will have many distractions, so I recommend creating a checklist so you don’t miss anything.

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 The Home 
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Preparing Financially for a Baby

Cute BabyThis is a guest post by Phil of Prime Time Money.

We’re expecting our first child in a couple of months. It’s an exciting time, filled with lots of uncertainty. Thankfully, because of a bit of preparation, we don’t have that much to be worried about financially.

Prior to deciding to have kids, every time I thought about the issue of children, the lyrics to the Harvey Danger song would repeat in my head: “been around the world and found that only stupid people are breeding…” I’m not sure if the song lyric was a slap at unprepared parents or if they were referring to the fact that anyone who decides to have a kid has got to be stupid. Either way, I’ve always felt strongly that I wanted to be *ready* before I brought a kid into this world.

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 Family 
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Should You Quit Your Job To Stay Home With Your Baby?

Sleeping BabyThis is a post by Connie Brooks, a new mommy in Louisville, KY.

Should you quit your job and stay at home with your baby? This is probably the biggest question new parents have to face once they find out their little one is on the way. The truth is, there’s no right or wrong answer to this question. It all depends on what is best for your family. If you quit your job and stay at home you are going to lose income. You have to weigh that against the benefit of having more time with your child.

Before you make that decision, it may help to weigh the pros and cons a bit, and take a logical look at things.

Can you afford to quit your job and stay at home with your baby?

Losing a large chunk of your monthly income isn’t easy for any family. You will have to make a lot of adjustments, not the least of which is trimming your budget. If you are home to take care of your baby, then you can breast feed without interruption (obviously if this is mom staying home and not dad!), you can cook regular meals instead of eating out, and you can spend less on clothing. All of those things save you money each month. You will also spend less on gas, and you will not have to pay for daycare services.

The only way to tell if you can really afford to quit your job and stay at home is to work out a detailed monthly budget. Factor in how much money you will lose, and how much you expect to save. Do not forget that you will have additional expenses once your baby arrives. You will have to pay for clothes every couple of months, formula if you use it, and more diapers than you will ever believe.

If you cannot make things add up, and you don’t see any way that you can quit your job and stay at home with your new baby, then you may want to look into working from home instead. You may not be able to bring in as much money as working your old job, but it may be enough to get you through.

Pay Down Your Debt First

If you have a large amount of revolving debt on your credit cards, or a hefty car payment or mortgage, make sure you factor those things in. If you were using the income from your regular job to pay off your debt, what is going to happen when you quit? You do not want to be forced to make late payments on anything, ever.

If you know you are in debt, and you are having a baby soon, please make paying down that debt and starting an emergency fund a priority. I say this because if you quit your job, and an emergency comes up, you will have no cushion. The best thing you can do for your family, and your new baby is to be in a strong position financially before you quit your job. What if your baby gets sick? What if you do? You have got to have enough money socked away to not run things down to the wire every month.

The Unexpected Parts of Staying At Home

Having a baby is overwhelming, in every sense of the word. It’s amazing, and there are no words to describe how wonderful it is, but it’s also very stressful. You new little one is going to sleep at most four hours at a time. The constant wake/eat/sleep cycle is enough to confuzzle even the most organized person.

You also have to remember that for nine months you have had various hormones blasting through your system, and after the baby comes those hormones go away. It’s not “in like a lion out like a lamb” either. It’s more like “In like a lion, out like a hurricane”. You can expect to be moody, possibly depressed, and certainly sleep deprived. There will be days where you are lucky to get a shower and eat regularly. It does pass, I promise! But the first few months will be hard. Whether you stay at home or go back to work, get your baby and your family on a schedule as quickly as possible. It will make either transition much more manageable.

Feeling Lonely?

Staying at home with your baby is wonderful, but you could find yourself feeling lonely. I am not a terribly social person, and I still found myself “attacking” my husband when he got home – just for a little conversation!

Make sure that you involve your support network as much as possible. Friends, relatives, in-laws, whoever wants to help, let them help. Especially if you go back to work. If you stay home, make sure you are getting enough social interaction. Loneliness, combined with post-partum depression is not fun, and it is avoidable.

The best advice I can give you about deciding whether or not to quit your job once your baby arrives is this:

Decide well in advance.

If you have nine months to work towards your goal of staying home, then you are going to be a lot more prepared. It is the hardest thing in the whole world to leave your baby somewhere and go off to work. If you know you have to work to provide for your family, or you want to work because you enjoy it – that’s ok! Just make sure that you make the necessary preparations in advance, and give yourself some breathing room. You may want to return to work, but not right away.

If you arrange all of the details before your baby arrives, then everything will go smoothly. You might be able to arrange with your boss to have an extra month off, or if you are staying home, it gives you that much more time to save and get ready.

If you are quitting your job for good, then give your employer as much notice as possible. There is no sense burning bridges! You may need to go back to that job some day, and the best thing you can do is to leave on good terms.

Whatever you decide, don’t let anyone talk you out of it. Other women in particular have very strong feelings about this. Don’t let your mother, your mother in law, or your boss decide what is best for your family. Only you can do that. Just take the time to work through everything before you take the plunge – one way or another, if you plan it well enough everything will be fine.

(Photo: mackro)


 Personal Finance 
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How To Draft A Basic Financial Savings Plan

When it comes to long term financial planning, my wife and I don’t really have one. We have some long term goals but we don’t have any dates pegged for those goals (which include starting a family, going back to school, buying a new home, etc.), which is about as useful as having no goals at all. That being said, it was about time we sat down and put pen to paper so we would stop committing the fourth deadly sin of personal finance – failing to plan.

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 Family 
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How To Include A Baby In Your Financial Plans

Cute BabyThis is a post by Connie Brooks, a new mommy in Louisville, KY.

Having a baby is a huge life event, and your entire financial outlook will change because of it. As if the initial cost of having a baby weren’t enough, you also have to ensure you’ve included your new addition to your overall financial plan. Here’s a quick guide on how to include your new baby in your long term financial plans.

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 Family 
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Babies Are Expensive! Total Cost of Having A Baby

This is a post by Connie Brooks, a new mommy in Louisville, KY.

Having a baby is one of the most incredible experiences in the world.

There are no words to describe the moment you hold your baby in your arms for the first time. When their little eyes look up to you and you realize you made the little tyke. There are no words to describes the feeling of pride the first time you see them turn over, or when they crawl and then eventually walk.

While these memories are priceless, having a child is a very costly endeavor. Most parents expect to pay for the obvious things once the baby arrives like food, diapers, and clothes but they often don’t anticipate “the other stuff.” When we had our daughter, we expected to pay for more food and diapers, but we never planned for “the other stuff.” From the moment I found out I was pregnant though, a seemingly limitless chain of bills started showing up. We were literally supporting our baby from the moment we knew about her. It doesn’t have to be that way.

If you are thinking about having a baby any time soon, here are some of the expenses (“the other stuff”) you’ll want to plan for, even before your baby arrives:

1. Prenatal Care

As scary as it is to think about, most miscarriages happen within the first three months. Chances are your Ob-gyn will not even want to see you until you hit the three month mark because of this. After that, you can expect to go once or twice a month for the next six months, and even more frequently for the final three months.

Every time I went to my Ob/Gyn, it cost me an insurance co-pay of $30. We had hyperactive prenatal doctors so we ended up going even more often than average. Our cost for pre-natal doctors visits over nine months was around $500. Your cost will vary depending on your insurance plan.

2. Prenatal Diet

Your baby is literally depending on you for its nutrients. If you don’t have a healthy diet, then your baby will not get what they need, and that could have long term consequences.

The truth is, we weren’t eating very well when I got pregnant. We ate out once, sometimes twice a week, and ate a lot of beans, rice and eggs otherwise. Doing that kept our before baby food budget to around $300 a month.

After I found out I was pregnant, our food budget literally doubled. We stopped eating out, and I bought fresh organic fruits, vegetables and yogurt. The only food I craved when I was pregnant was steak (which was odd since I am a semi-vegetarian!). The steak was expensive too because I chose to buy only top quality grain-fed beef.

I did not care how much our food ended up costing us, I wanted my baby to have every building block she needed to grow. Over a twelve month period (I breast fed for three months afterward, so we kept our diet the same.) Our food ended up costing us $7,200. Prenatal vitamins added in another $270 over nine months.

3. Maternity Clothes

– I gained around 20 pounds while I was pregnant, so my clothes fit me for most of my pregnancy. However, by the eighth month, there was no containing my belly. I had to face facts and invest in a few good quality maternity clothes. I bought a week’s worth of clothes as cheaply as possible. I also used my husband’s shirts and bought things like hip-hugger pants that I could wear after my baby. The total cost of my maternity clothes was around $400. If you’re careful you might be able to get by cheaper, but it could easily cost more depending on your needs. Try to maximize sales whenever you can!

4. Baby Clothes & Supplies

We were very blessed because our friends and family gave us nearly everything our daughter would need for her first few months. If you don’t have a strong supportive network, then this will be a real expense.

Wal-Mart and Target have the most reasonably priced baby clothes. If I had to put a price on what we were given I would say that it amounted to easily $800 to $1000 worth of diapers, clothes, shampoo, and supplies. Again, we had an extremely generous family, who put all they had into helping us prepare for our baby. In retrospect, If I were the one paying for the items, I would have spent around $400 total on clothes and supplies for my daughter’s first few months – and that would have been plenty.

5. Nursery & Travel Items

The crib for our daughter was $500. Her mattress was $100. We bought a crib that would turn into a toddler bed, and eventually a full sized bed as she grew. Her car seat and stroller ran us about $400 – again because we bought for the long term and wanted something that would last through several children if necessary. You can definitely do this cheaper than we did! The total cost for her nursery was around $1,500 after decorations.

6. The Big Day(s): Hospital and Delivery Costs

How much this ends up costing you will depend on your insurance, how difficult your labor is, and how well everything goes.

In my case, nothing was simple. I spent two days in the hospital being induced and ended up with a c-section. My daughter had a fever when she was born, so she spent a week in the hospital on antibiotics undergoing a lot of tests. (She was fine, thank God!) They kept me for four days after my surgery. I can honestly say that for a month after we came home I dreaded going to the mailbox and pulling those medical bills out!

The total cost for her delivery was nearly $4000.

7. The Paperwork

After my daughter was born, we did have to take care of some paperwork. Particularly ordering several copies of her birth certificates. This was another unexpected cost. I’m not sure why I thought that the hospital would provide us with one – they didn’t. They sent her birth records off and we had to order an official copy. Those were $10 each, and we ordered 3, so we $30 spent on her paperwork.

8. The Aftermath

In the first few months following her delivery she and I both went back to the doctor a couple of times for routine checkups. This was not a huge expense, but it was one I did not expect. The follow-up visits probably ran us around $150.

From conception to birth, our daughter cost us about $14,000. Fourteen thousand dollars. Oh, and that does not even take into account the diapers or the eventual formula costs once I went back to work. It also does not include childcare, which thankfully, we did not have to get.

If you are considering having a baby, please make sure that you get a hefty savings account going before you take the plunge. Many of these costs we had not planned for, and that made it more difficult than it had to be. When we planned out our finances before getting pregnant, we always planned out what we thought the costs would be after we had her, and we did not take into account what it would cost just to get her to delivery!

I am very sure that if I had it to do over again, I could do it for less money. I think that I went into it from the mindset of doing what I thought was right for my baby, and the finances took a backseat. That being said though, my daughter’s birth story is an excellent example of how having a baby can easily cost you a fortune – so it’s something to think about.

How about you? Do you have children? What would you say it cost you and your spouse to have your baby? Leave us a comment below!


 The Home 
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Welcome Connie!

Connie BrooksLast week, I had the pleasure of introducing Gary Bonner, who will be giving his perspective on current personal finance issues, and this week I have the pleasure of introducing Connie Brooks. Connie is a personal finance blogger and author about to release her first book – How to Retire Comfortably and Happy on Less Money Than the Financial Experts Say You Need: Insider Secrets to Spending Less While Living More. She regularly blogs at ThriftyMamas.com and recently started a family with the addition of a baby girl.

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 Personal Finance 
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7 Deadly Sins of Personal Finance: Don’t Plan For the Future

7 Deadly Sins of Personal FinanceHot on the heels of a pretty bad sin yesterday, Failing to Budget, comes its brother in arms – failing to plan for the future.

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