Budgeting for a Baby

Baby Progress
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Hi Pocketchange enthusiasts, and welcome back! The title is a sure giveaway, but part of the reason for the delay in posts is that we’re pregnant! Talk about a life change already, and Baby Pocketchange isn’t even here yet!

We’ve been slammed with several things (appointments, birthing class, etc.) and frankly, we’re both tired. Mrs. Pocketchange is hanging in there, slowly getting through the nauseous feeling. She had it almost every day! Thankfully, she’s pulling through those tough nights.

Now that this huge life change is on the way, we definitely need to update our budget. But first, a little backstory.

A QUICK HISTORY LESSON

Mrs. Pocketchange and I have been together for 13 years! Seems like such a long time, but also such a short time all in one package. There are such fond memories!

One of the many discussions we’ve had over time is a plan for children. You know, just the other day we realized it had probably been a few *years* since we talked about the number of children we wanted! But – one thing has really remained constant – we both want Mrs. Pocketchange to stay home when Baby is born.

Even several years ago we knew childcare was expensive and it’s only gone up as time has moved forward. Considering how much less we made even back then, it’s no surprise to us this is the option we plan to pursue. There are other important reasons why we want to raise our child in our home, but our focus here is on the financial aspect.

LOOKING FORWARD

If you’re following along so far, you’ll see (like I do) a big dark mass growing on the horizon.

That’s just the mountain of changes that are coming our way, and we’re both feeling a bit overwhelmed with the costs associated with a new addition to the family. We’ve already had several medical bills, and with a few other necessities around the home popping up this year so far (tree trimming, some dental work that needs to be done) – we’re scraping by with our pocket change!

One of the great and also perhaps scary things about writing a finance blog is that I can and should use my own advice. For example, if I had a client ask me for some coaching tips with this big addition to the family, what would my suggestions be?

  1. Breathe!
  2. Take a Financial Inventory
  3. Plan ahead for the change – Work up a new budget!
  4. Make adjustments and keep pushing forward!

mrs-pocket-change-bump

The Baby Pocketchange bump!

PLANNING THE BABY BUDGET

I will admit here and now that I don’t have everything figured out. If I did, well, I’d have already had FIRE’d by now, right? That being the case, it’s time to buckle down on our budget, cut whatever we can, and be honest about our spending and income.

What’s FIRE? If you need a quick refresher on our journey to FIRE – check out our Start Here post!

My number one priority is to help us make the adjustment to one income. This will be the biggest change to our budget, and it’s also the biggest ‘dark cloud’ I see hanging over us. Mrs. Pocketchange brings in roughly 1/3 of our total income with her skillset, so naturally, this means we need to evaluate our budget.

But – where do we start?

We’ve already made significant cuts over the past year, and we’ve opted for cheap or unconventional options. For example, last year we canceled our long-standing contract with T-Mobile and switched to Mint Mobile. We don’t have cable – or even a car payment like many of our millennial counterparts. Oh yes, we’re both millennials by the way!

It seems like we just don’t have much room in our budget to add more spending (for the baby, medical bills, or anything else that comes up, etc.) or to account for the significant drop in income. It’s not hard to see the writing on the wall that this change will call for drastic measures and/or additional sacrifices. We just need to determine what those will be.

We have already started to attack this problem though, with some of our own recommendations. I have been using Excel/Google Sheets and Mint for creating/maintaining our budget. I also add income calculations and other general notes and have recently been using YNAB to help capture expenses accurately and not just look back (Mint is great for this) but to look forward.

If you haven’t checked out our recommendations recently, head over to The Goods page and give it a look!

I will say in closing – there’s nothing like having a good family discussion about finances. It might be hard or painful, but it’s the responsible and adult-ish thing to do.

The Pocketchange Family goal for this next week – plan and execute a budget meeting!

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