How to Have Kids Without Going Broke

Babies are expensive. The hospital bills. The diapers. The childcare. It all adds up to a lot of money, and for many families, the cost is preventative. They choose not to have a baby until they feel they can afford to do so. The trick is, while your finances might improve with age, your ability to actually have a baby decreases. So you have to find the sweet spot between having lots of extra cash on hand and having a biological imperative.

If you’ve been waiting for that sweet spot, the joke is actually on you. As any parent can tell you, it’s almost impossible ever feel completely prepared to have a baby. Finances are a huge consideration, however, and that is one area where you can do some preparation so that when it is time to have that baby, you’re not going to go broke in the process.

Do your benefits related research.

The choices you make when you choose your benefits plan every year make a big difference in how affordable your baby will be. If you’ve been choosing the cheapest options for healthcare, it may be time to look again at the various parts of the plans available to you.

You want a benefits plan that includes low copays for pregnancy care. You want low copays for new baby visits that will be happening every few weeks for almost the first year. If you don’t have an option for low copays, look for one that allows you to build up a health savings account. You can even build up a balance in your health savings account for years before tapping into it, effectively letting you save up for appointments, hospital delivery and all of those immunizations and appointments well in advance.

Also be sure you research and understand what parental benefits your company offers. Will you get paid leave? How many weeks? Is it only partially paid or unpaid leave? Some people even change jobs to one with better benefits to prepare for pregnancy and childbirth.

Make space in your current living conditions.

Babies don’t care about school districts. They don’t care if they have their own rooms. Toddlers don’t care either. That means you have years before you have to worry about running out of space. Even better, if your children are given a room to share from their early days, there is no need to move at all!

The largest expense for many families is a new, larger home. Unless there is a safety concern, there is no reason to buy a bigger house and take on bigger payments just to have a baby. The baby will sleep just about anywhere. Calculate how much money you would have spent on the larger mortgage and send that money straight to savings. You’ll have it ready for more pressing needs.

Slash your budget now.

The very best thing you can do is to arrange your lifestyle and your banking so that you are only living off one person’s income. If you are budgeting to effectively only live off one person’s income, you can easily decide to stay home with a baby without affecting your lifestyle. If you do choose to continue working, you have the second person’s income to help cover childcare costs, diapers, and other baby-related expenses.

If you have gotten into a trap with debt, consider taking out a short term loan to help you pay off credit cards and other expenses more quickly. Avoid running up more debt on the cards and as soon as the payments are finished, you will have your monthly payment money to send directly into emergency funds to prepare for your larger family.

Make your budget as tight as you can now and save that extra money. Not only will having that cash on hand give you peace of mind about future expenses, it will also prepare your perspective on personal finance to be ready to accommodate a baby and its expenses.

Don’t buy new baby gear.

There are so many adorable baby items out there, it’s only natural to want to buy them all for your pending newborn. Resist the urge to buy. Baby gear gets used for very short periods of time, and you will wind up spending a lot of money on items that your baby might not use at all. Rather than spending hundreds of dollars on baby swings, expensive stroller combos, baby clothes, wipe warmers and decorative items, borrow them.

You will definitely need to buy a new car seat for safety reasons, but everything else can be borrowed or purchased second hand. Saving money is often as simple as hitting consignment shops to pick up a gently used bassinet instead of spending hundreds on a brand new one that will only be used for a few weeks. Likewise the baby swing, the bouncy seat, the play pen and so much more.

Consider the items that will have the longest lifespan or that are required for safety. It might make sense to buy a new crib and car seat, for example. Borrowing a stroller from a friend with older children or taking hand-me-downs will cut costs tremendously on some gear, allowing you to spend what you need to on the bigger ticket items.