September 18, 2017

A Daddy's Financial Tips

Hello. Hello. I know it’s been a while, but it has been for good reason. I’m excited to announce my wife and I welcomed our second child into the world a couple of weeks ago, and Daddy has been busy! Well I’m back, and since I’ve now gone through this miraculous process twice, I thought I would kick things back off by sharing a few financial tips when it comes to having a baby.
  • Be prepared before your due date! This isn’t just a financial tip, and as I can now attest with our second child coming two weeks earlier than originally expected, it is critical. Have the nursery ready, have some essential supplies purchased, and have some clothes bought. Have the car seat properly installed and your personal and professional calendar winding down. It’s truly awesome to welcome a little one, but it’s also hectic, overwhelming, and exhausting. You don’t need unnecessary stress that can be avoided, and financially, you don’t want to be in the position of having to buy and pay for things out of necessity without careful consideration and without the opportunity to thriftily shop around.
  • If your income will be impacted due to maternity leave or paternity leave via unpaid time off or disability insurance versus your typical salary, budget for this before the baby! I would suggest you work towards boosting your cash reserve so that your lifestyle can remain the same even though your income will be reduced. Frankly, I might even suggest that you save up more than you think you’ll need to offset your lower income because having a baby is an expensive time between all the medical expenses, all the necessary purchases, and the one-off’s that become needed, but weren’t originally expected.
  • If you’re buying nursery furniture that can be converted as the child gets older, do you really intend on utilizing that feature? If so, you may want to consider going ahead and buying the additional pieces before they become discontinued and you end up getting stuck with the typically pricier, convertible furniture you didn’t use or couldn’t convert.
  • Similarly, before you buy the car seat, consider the car seat’s life expectancy. When does it expire (yes, most have expiration dates)? How big of a child is it made for? Will it last until the child can face forwards, will it last until the child no longer needs a car seat, or is it just for the first couple of years? We ended up purchasing two car seats the first time around, and I’m glad that we did, but as an inexperienced dad-to-be, I can tell you I didn’t know I’d need more than one car seat for one kid when we bought the first car seat.
  • This is a little opposite to my message of urging you to be prepared, but don’t be over prepared for the first few months of life. By that I mean don’t go crazy buying insane amounts of newborn diapers and 0 – 3 months’ clothes. Your child will likely need a size 1 diaper at some point, and then size 2, and then size 3, and so on. Your child will also need clothes for the rest of their life, not just the first three months, and they grow quickly! All I’m saying is that those newborn diapers and super tiny outfits may not be useful for very long, and they are not free!
  • Realize that all baby outfits likely face the same fate: spit-up or worse. There are some latest and greatest name brand baby outfits out there that cost quite a lot, and if you want a few, or you can afford lots of them, then go for it. That said, there are a lot of very reasonably priced very nice looking outfits that aren’t nearly as expensive and will share the same fate of being at the mercy of stain-removers and the washer and dryer. Dress your baby how you want to dress your baby, but don’t let their fashion derail your finances!
  • I don’t often recommend specific companies or services, but get Amazon Prime. The ability to order extra baby mittens, diapers, wipes, formula, a baby scale, or an outfit for your favorite team’s game and get it without leaving your house in a day or two is unbelievable. They cannot be making money on my family right now with all the shipping fees that are free through Amazon Prime, and don’t worry, we do recycle our cardboard!
  • Take care of the new baby’s business. This starts with the application for a Social Security Number and a birth certificate in the hospital, but your homework is not done. You need to get your baby added to your health insurance, dental insurance (if you have it), and vision insurance (if you have it), and most of the time this has to be done within 30 days of the birth and requires a Social Security Number and a proof of birth. The forms are long and the interactions with these government agencies and insurance carriers is not particularly fun, but it must be done correctly and in a timely manner.
  • If you don’t have wills, power of attorneys, and health care directives, now is the time (your will is how you name a guardian for your children). If you do already have these documents, go back through them and examine your retirement plan and insurance beneficiary designations to make sure your wishes would be fulfilled and your child would receive what you would intend them to. If, like us, you now have more than one kiddo, make sure you have the proper wording in your documents and beneficiary designations to not accidentally exclude any of your children!
  • Finally, be careful with unnecessary extras. “Unnecessary” can be a matter of opinion, but with all the digital sharing of everyone’s baby’s everything and all the “super cute” products available for purchase out there, be careful. I would suggest you not order anything after 9 PM to make sure you’re not sleep-buying and anything terribly pricey without talking to the other parent to keep the peace.
Having a baby is one of life’s most amazing experiences, but without careful preparation, thoughtful consideration, and prudent restraint, it can be financially challenging. Certainly, get your precious baby what they need, and splurge and get them a few things that are just neat or fun to have to celebrate the occasion, but be sensible. Remember, your new baby is going to need you for at least 18 more years, and anything you don’t spend now can go towards their car, their college, or their wedding!
I’ve got to run. Someone’s awake and it’s my turn!

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