Having a Baby? — How Are Your Finances?
an oftentimes overlooked conversation
Sometimes it’s easy to get so excited about a new baby that you forget some of the realities. While there are all kinds of ways you can cut expenses, the fact that your family budget is going to change is pretty much inescapable. After all, your life will change — not just after the baby is born — and so will your priorities. Here are some financial considerations as you prepare for your new family member.
There’s soooo much to consider when preparing for your baby. Here’s a podcast I did with Camille Diaz for her podcast, MoneyHeart. What I don’t mention here is most likely mentioned in the podcast.
Now, back. to the article….
Creating A Household Budget That Works
Pregnancy is a great time to work on creating a household budget that works; especially if you haven’t been using one thus far. If you feel yourself resisting the budget concept, take a deep breath and discover where that’s coming from. I know from my own adult kids that my recommendation to live from a budget has felt to them like my way of controlling them through their money. It’s actually from my own personal experience with money. If you have the desire to be in control of your money, budgeting is how you do it.
Budgeting is not about living on as little money as possible. It is about being organized with how you use the money that is coming in so you can create an amazing financial future for you and your entire family. Life is filled with lots of peace the moment you have a financial plan in place.
It’s important to understand that you won’t create a budget once. Budgeting is a monthly habit worth having. Each month is different because some months include major holidays and/or gift giving opportunities, vacations, family trips, and unexpected events. No, you can’t plan for every possible financial scenario, but you can plan for the most predictable ones. It all starts with being honest with yourself about your current spending habits.
Your family budget is going to look different after the baby, so it’s a good idea to get into the habit of creating a new budget at the end of each month that will be used for the following month. Expenses are going to be funneled to different things during the pregnancy as well as once your baby is born.
90-day Look Back & Debt List
Take a good look at how you’ve spent your money over the past 90 days. Grab some paper and a writing utensil. Make a list of each category in which you spend your money (ie, groceries, gas, rent/mortgage, dining out, clothing, etc.), then add up how much you’ve spent in each category over the past 90 days. Next, divide your totals for each category by 3 to get the average of what you spend in any given area each month. I promise this is worth doing.
Remember also to take the time to write down all of your debt. Who are you sending money to every month because they gave you a loan or a credit card? Write them all down. Don’t just write down the name of the company. Include how much you owe them, the minimum payment, and the percentage of interest you’re paying them each month. Post this list on the fridge or wall where you typically sit to pay your bills.
Identify the Gap
Now, on another piece of paper, begin writing down your income and expenses. Include it all. This only works well when you include every single expense. Be prepared to forget about some. You can add them as your brain recalls them. Add up your income and expenses. Do you have money left over after all the bills are paid? That is what I refer to as “the green gap.” This is often times a major reality check as you discover who small your green gap is. When I was a single mom of three, my green gap was 75 cents. Most of us are dangerously close to losing everything because we weren’t taught the importance of budgeting AND living within that budget.
Maximize and Apportion the Gap
What’s next? Now it’s time to look at the number you get when you subtract your expenses (bills) from your income. If your expenses are more than your income, look around you. Is there anything you can sell? If so, do it. What subscriptions are you paying for and not using? Close the account(s). What subscriptions can you live without for a few months? Close them. What can you do that is legal, moral, and ethical to add to your income? Everything I’ve mentioned thus far I refer to as “maximizing the green gap” and is beneficial whether your current gap is green or red. Find ways to make your green gap as big as possible.
Pregnancy is a great time for you to look for ways you can make your green gap bigger. Once the number is positive, set 10% aside for fun, such as dining out, watching a movie, or whatever else will help you and your family know that you are in charge of the money. Next, put 45% toward a credit card or loan debt and invest the remaining 45% so you know you’re planning for your future.
What to Invest in First?
The very first thing to invest in is an emergency fund. Start with the goal of $3000 in savings. Then work your way up to a full 7 months of monthly expenses saved up. You have no idea when you’ll find yourself without an income or with a broken down car or major appliance. Once you’ve got a good sized emergency fund, then start looking at other ways to invest your money for the future, such as retirement or college funds.
This might seem like a silly question especially since we live in such a technology driven time in history. The fact remains that home birth is still an option. It’s also an option that more and more women are choosing.
You know your situation better than anyone else. There is a small percentage of women who will absolutely need what’s offered in the hospital. Honestly assess yourself, your dreams, desires and goals for your birth experience. This isn’t an event to just gloss over or “follow the crowd.” Birth will change who you are as an individual. Where and with whom you give birth will play a role in whether or not you find immense joy or great sorrow in your experience.
When it comes to cost, in most cases, a home birth will require you to pay out of pocket and then submit a claim to your insurance to be reimbursed. This is because not all home birth midwives are required to be licensed and unlicensed midwives aren’t typically covered by insurance companies. When I was offering home birth services, I wasn’t required to be licensed nor certified. I also chose to not bother with attempting to jump through the hoops setup by insurance companies. Why? I had no desire to have insurance companies telling me what I could and could not offer to my clients. That’s your job as the person paying the bill. My clients had the final say, which is as it should be in my opinion.
There are many home birth midwives pushing for all midwives to be licensed and/or certified. This has been happening for a few decades now and no one is inviting you — the birthing woman — to the conversation. Licensing and certifying of midwives may sound like a great idea. It has thus far not proven to be the great idea many thought it would be. We all want to know the people involved with our care are competent and yet the fact remains that passing licensing and/or certifying requirements does not prove competence. The opposite is also true — not being licensed nor certified does not prove incompetence.
The bigger issue here is that the licensing/certifying board then determines what your midwife can and cannot do for you. For instance, birthing women in Arkansas — as of today — have zero say in whether or not their cervix is checked. Those licensing midwives in Arkansas require it to be done and a midwife was recently arrested for not doing it. To learn more about the double-edged sword of licensing and/or certifying midwives, I highly recommend reading the book Making Midwives Legal: Childbirth, Medicine, and the Law by Raymond DeVries.
You or your sweetheart may currently believe that hiring an Obstetrician and giving birth in the hospital is the absolute best and safest option. The sad truth is that it’s more often than not a situation that turns into a nightmare that haunts far too many women for the rest of their lives. I highly recommend reading SAFER CHILDBIRTH? A Critical History of Maternity Care by Marjorie Tew to learn more about home birth verses hospital birth based on current research and studies.
Understanding that some women have health conditions that will require they give birth in a hospital, there are ways to do so without having your rights trampled into the ground. If you’ve never given birth before, get into a childbirth education course that is not sponsored by the hospital. Find a course that will speak solely about birth and not how to have the most rewarding experience as possible in the hospital setting. If you don’t go into the birthing sequence with an understanding of what drives the birthing process and how to keep things moving along smoothly, the hospital protocols and procedures will walk all over you; leaving you feeling broken.
What to Ask and Why
The worst thing any woman can do when it comes to bringing a new human into the world is make the process all about money and paying as little out of pocket as possible. Take money off the table for now. What do you want out of your birth experience? What have other women told you about their birth experiences that you’d like to avoid or experience? How involved would you like your sweetheart to be? What feels right to you? What is tugging at your heartstrings? Write it down. Have an open and honest conversation with your sweetheart. Discover together the truth about birth by reading a variety of books, watching a myriad of videos, and talking with those who have varied birthing experiences.
There are some questions you can ask to get an idea of who you’re really talking to when interviewing Midwives and Obstetricians. There is far too much bait and switch happening in this industry, which is one reason I do what I do.
The very first question to ask any midwife is, “How many clients do you accept with the same due month?” Any number higher than 4 means that she will most likely either (1) not make it to your birth, (2) push a possibly unnecessary induction, or (3) risk you out of a home birth. It has sadly become common practice for far too many midwives to take on more clients than they can safely support in any given month — whether or not she has backup isn’t the point. There is no guarantee that her backup will be available either and you’re not paying nor will you be spending your pregnancy with her backup person. So if she accepts more than 4 clients with the same due month, move on.
If she says that she only serves 3–4 clients with the same due month, ask how often she induces. Also ask for a list of her past clients who are open to sharing their birth experience with you. The best possible scenario is to find someone who interferes as little as possible and knows when to intervene or transport to the nearest hospital.
What does it mean to “risk out” of a home birth? This simply means that the midwife has found a reason to refer you to an Obstetrician for a hospital birth. You will have paid the midwife some if not all of her fee when this happens and — in most cases — it will not be refunded. The easiest way for any midwife to risk a woman out of a home birth is to fail to teach her the truth about prenatal nutrition. Prenatal nutrition is the foundation of an amazing birth experience for most women. So when a woman has no idea what or how she should be eating over the course of her pregnancy, it is almost guaranteed that she will experience one or more “pregnancy induced” illness(es) that will require the support of an Obstetrician and a hospital birth. I am not speculating here. I have personal knowledge of midwives doing this and it angers me. This is your warning.
When interviewing Obstetricians, a great question to ask is, “How do you feel about birth doulas?” If the answer is basically that the OB would prefer for you to use the nursing staff, move on. Another question that will give you insight into how the OB really feels is to ask, “Do you backup the local home birth midwives?” If you have your heart set on using an Obstetrician, reach out to your friends who have given birth. Listen to their stories. The ones who have a birth story close to what you desire, find out who her care provider was.
Also ask about each hospital and their policies and procedures surrounding the birthing process. Many only allow a 24-hour window for your birth. The birthing process can take weeks to start and days to complete so giving it a timetable to follow is one of the worst things humans ever did to it. Birth is fluid. It ebbs and flows based on your energy levels. Your energy levels are dependent upon how much you’ve eaten, how hydrated you are and whether or not you feel tired. Any person or facility that won’t allow you to eat, drink, or sleep is working against the normal and natural birth sequence.
Are Two Incomes Necessary?
Lots of women work during their first pregnancy as a way to keep themselves busy. Getting serious about your finances and creating a household budgeting routine will open your eyes to whether or not two — or more — incomes will be necessary. There’s also the scenario of you wanting to work away from home. Many women who feel this way during their pregnancy are surprised by how hard it is to leave their sweet new baby behind when it comes time to return to work so be super realistic when it comes to making the decision to stay home or not.
If one of you is going to stay home with your baby, it’s important to think about the real numbers that will result from that decision. Sometimes dads stay home; more often, moms do. But the gender of the parent is not important when you’re talking finances.
Take a good hard look at all the numbers involved with both parents working. It’s not just about the income loss but also the necessary additional expenses when both parents work, such as gas, work clothing, childcare, etc. So, what does your budget look like now verses what it would look like with one income. Most couples discover that the loss of income isn’t as financially impactful as continuing to have the second income and all the expenses that go with it.
Understanding that not all moms have a desire to stay home, there is nothing wrong with both parents working as long as the entire family understands the financial impact that doing so will have. Thankfully we now live in a time in history when both parents can work from home either telecommuting for a company or working for themselves. You can take anything you love doing and turn it into an income producing activity. Combine that with eliminating unnecessary spending and you just might find a household budget you can not only live with but enjoy using.
Should you determine that two incomes are necessary, at least for now, then know that you have options when it comes to childcare. If you have friends or family members who are willing to watch your baby for free, and you like their care-giving style, then that can be very helpful with regard to your childcare budget.
Nonetheless, it’s still important to remember that having the means to hire a babysitter or mother’s helper when needed comes with its disadvantages too. After all, family members, like everyone, get sick, go out of town, or otherwise find themselves unable to babysit. It can put you in a bind when something urgent comes up and there’s no money to hire help, which is just another reason to have an emergency fund saved up.
Is All That Baby Stuff Necessary?
I get asked this question a lot! The marketplace loves leading us to believe that we need all their stuff. The fact is that your little human actually needs very little. At the top of the list is you and your sweetheart. Your baby also needs to know what love and healthy touch feel like. This means that your baby needs to be held as much as possible, which is why holding your little one is a very strong desire. It is instinctual. So, what does your baby need in addition to you and your love and touch?
Your baby does not need a crib. The only babies that do best in a crib in their own room are babies born to smokers. Babies born to smokers have a higher risk of Sudden Infant Death Syndrome (SIDS). This is because as we sleep our body cleanses and detoxes. Smokers are toxic on a cellular level. Please don’t shoot the messenger. It is a known fact. So, babies born to parents who smoke — even if only one smokes — need to be in a crib in their own room.
Bed-sharing, also known as co-sleeping, is the absolute best option when it comes to sleep and a new human. Breastfeeding can happen easily lying down on your side so both mother and baby have the potential to experience amazing sleep. Yes, there are some things to know before bed-sharing. CLICK HERE for the best place to learn all the things there are to know about bed-sharing.
What if you don’t feel like bed-sharing is your best option? Invest in a high quality co-sleeper. This is a device that you can attach to your bed so the baby is within arms reach and not between mom and dad. Your baby will need you every 3 to 4 hours during the night so make it super simple for both of you.
Breastfeeding pumps, bottles, and pacifiers — in most cases — aren’t necessary. If mom will be working outside the home and won’t be able to have her baby with her nor will she be able to get to her baby every few hours to nurse, then make these purchases 4 to 6 weeks after the baby is born. I make this recommendation because breastfeeding can be challenging and having these items readily available immediately following birth undermines your determination. It’s best to have your local La Leche League Leader or Lactation Consultant on speed dial for the first 4 to 6 weeks post birth.
A sturdy, rear-facing carseat is an absolute must. You do not, however, need to have one with a detachable base. Instead, invest in at least one wrap or sling. It is best for your baby to be in your arms. Having your baby in a sling or wrap allows you to have your hands free so you can accomplish everything you need to accomplish and also tend to the needs of your baby. Wraps and slings are also easier on your body and better for your baby’s body than the detachable carseat.
It’s now time to talk about cloth verses disposable diapers. To be clear, today’s cloth diapers ARE NOT you’re mom’s or grandma’s cloth diapers. After the birth of our seventh baby, we made the switch to cloth diapers. I now wish we’d been using them all along. They are worth every single penny! Stock up on enough so you’re washing them once or twice a week. You will get into a rhythm. There are a lot of cloth diapering groups you can join to discover all the details surrounding the different types.
For those couples or single parents who find themselves in a financial bind, there are some financial assistance programs that may help. I first recommend asking family for help. If they are unable to help, food stamps and health care are two commonly available aids obtainable through state or federal programs. There is no shame in using these programs and other financial supports as you look at your future financial situation.
If you’d like help with any part of your financial plan, schedule a discovery session with me to chat about how I might best support your financial journey.