Sunday, August 18, 2013

Countdown to TTC: Week 50

Piggy Bank

Saving Up for the Baby Circus

Even the most frugal parents find that a new baby--especially a first child--comes with a lot of swag.  I refer to all the accoutrement that accompany each tiny bundle, as well as the hilarious show that is often put on by parents attempting to juggle all of these objects, as the Baby Circus.  Each little prince or princess requires a substantial up-front investment in terms of furnishings and supplies, as well as a lifetime of age-appropriate updates and upgrades.  Must-haves include a place to sleep (possibly 2 if you want to keep LO close to but not in the parental bed for some amount of time), a car seat, diapers (disposable or cloth), and clothes.  These are just the bare minimums and by themselves can add up to an investment in the hundreds (with good deal hunting) or considerably more.  Then there are some of those nice "luxury" items like a stroller, toys, breast pump, bottles, high chair, swing, etc., etc.  I don't feel that buying all of these items will make one's child happier or more well-adjusted, but they certainly seem like they would make life with an infant a bit more convenient and manageable (at least until you are so overwhelmed with objects that you have a hard time remember it's all about having a happy, well-loved child).  

Just thinking about all of the supplies needed for the great Baby Circus makes my cash hoarding instincts kick in.  Since I have the benefit of a full year to prepare for trying to conceive, I figured now was a good time to start preparing financially for having my own darling money pit, while researching sensible ways to save and cut back too.  Step one of my plan is modifying the monthly budget to incorporate a small savings each month for future conception, pregnancy, and baby expenses.  In addition to my various other savings stashes (#1 of which is saving monthly for a down payment for a future home purchase), I have now added to the monthly budget a $25 savings for pregnancy and baby.  When I have more left over each month, I save more and distribute it across my different savings categories.  It may not be a huge amount, but now I know that by the end of this year of waiting I will have at least $300 saved that is ready to be dedicated only to baby-related expenses.  If nothing else, that's at least a good amount to get started amassing a cloth diaper stash. 

I want to mention here that if DH and I didn't already have a monthly budget, I would have put that as step number one and would instead have spent this week taking action to get a financial plan in place for us (or at least to buy some books about it).  After going through Dave Ramsey's Financial Peace University a few years ago and then taking a class at the local university on financial management (many community colleges and schools of continuing education offer such courses for $100-$200 dollars), I began tracking our monthly expenses and also deliberately saving for specific purposes.  We don't follow a strict system or cut off our expenses in a certain category each month because we are over budget, but I do like to stay aware of our money and feel like it is working for me and not the other way around.  At the start of the year I make a tentative budget outline (in Excel) and then after a couple months of expenses I download all our banking activity and fill in a monthly spreadsheet of our income and costs (lately I have been using the free trial version of Microsoft Money, but there are many fancier options if you are willing to pay an up-front cost for the software).

My second step for this week's theme has been to establish a designated cash envelope for future baby expenses.  This is a more opportunistic savings vehicle.  Whenever someone pays me back for something in cash or I get paid for babysitting (another activity I highly recommend as part of your preconception prep), I will stash it away in this envelope.  I'm sure some money will inevitably flow out of this fund when it turns out we actually needed some of the cash we stashed in it, but I think over the course of a year there will be a definite net gain.  Then this on-hand cash will be great for all those baby bargains I can't wait to buy--good-condition used baby supplies and clothes at consignment shops, Goodwill, and on Craigslist.

What about you?  How much do you think is a good idea to save before getting pregnant?  Are there any important expenses I'm forgetting about?  Do you have any tips for saving money on pregnancy and baby stuff?

Update:  After a great discussion on Baby Center about saving up for baby, I thought I had better mention an alternative baby savings plan that could be great for some people.  It's called the 52 Week Money Challenge and it involves putting away a different dollar amount each week that corresponds to the current week number in your countdown.  That is, week one you save one dollar, week two you save two dollars, etc. up until week 52 when you put away 52 dollars.  It sounds really manageable because the amounts aren't individually large, but by the end you save almost $1400 dollars!  This especially sounds like a good plan for reluctant savers who benefit from seeing their stash growing over time, which motivates additional saving.  Given my preference for having a set budget, though, I think saving a set dollar amount each month is personally more my style.  

For more in this countdown series, see last week's challenge about Hydration.

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