Author Topic: Planning for Finances with first child due in July  (Read 4864 times)

Dmy0013

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Planning for Finances with first child due in July
« on: March 21, 2016, 09:20:53 AM »
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« Last Edit: April 13, 2016, 09:33:03 AM by Dmy0013 »

little_brown_dog

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Re: Planning for Finances with first child due in July
« Reply #1 on: March 21, 2016, 10:18:41 AM »
Every baby is different. Sometimes babies get sick and need an extra hospitalization, others are just prone to colds and are in and out of the pediatrician's office, and still others never seem to get sick.

The monthly cost of a healthy baby is predicated on a few things:

1. Breastfeeding or formula feeding - Breastfeeding is much less expensive IF (and this is a huge if) your wife and baby have no problems and do well with it. If your wife has very low supply or other problems and needs to see consultants, take herbs, drink teas, eat a ton of extra food, etc etc just to keep going, then it can be just as expensive as formula feeding. My daughter is 100% on formula because we couldn't breastfeed. She goes through about 1 can per week and is almost 6 mo (so she's eating alot more than a newborn). I budget about $100/mo for formula, but spend less because of coupons (my usual bill is around $80-90/mo).

2. Diapers - If you use cloth, you won't be buying many disposables. If you go with disposables, generic are less expensive than Brand name. I spend a max of $40/mo on my name brand diapers. Even if you plan on using cloth, budget for diapers. Cloth diapers will require alot more water usage so your water bill will be higher, and very few people use cloth 100% of the time.

3. Wipes/creams/etc - Again depends on brand. I spend a max of $15/mo on this stuff.

Overall baby budget - $150
I find that $150/mo is plenty to cover the usual purchases of formula, wipes, diapers, and every now and then a refill of our preferred diaper cream. Some may think this is a bit high, but I generally recommend over-budgeting in the baby category, since you never know when the baby might need an extra doctor's visit, etc. You also won't be able to tell if your baby can be 100% breastfed without issue until the baby arrives and is eating well for the first couple weeks, so it is less stressful to just set aside some money for formula costs just in case.

As for a baby efund, I would plan on having a couple thousand above what you expect to pay for the birth saved in case of emergencies. Sometimes an emergency c section is needed and then the bill is higher. Other times, a baby may need to stay at the hospital for an extra day or two if they lose too much weight, can't breastfeed correctly, etc. You want to be able to plan for these costs without demolishing your own efund. So for me, if I thought the birth would be up to $1000 after insurance, I'd strive to have up to $3000 available just in case.
« Last Edit: March 21, 2016, 10:29:00 AM by little_brown_dog »

slappy

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Re: Planning for Finances with first child due in July
« Reply #2 on: March 21, 2016, 10:25:00 AM »
Have you looked into daycare? In my area, it's about $1k a month. Plus the formula if needed and diapers.  Some daycares won't take cloth diapers, so if that is in the plan for you, make sure you check with the day care. 

Chrissy

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Re: Planning for Finances with first child due in July
« Reply #3 on: March 21, 2016, 10:42:04 AM »
Our 5-week old will cost us ~$40/mo in diapering supplies monthly.  She cost us ~$180 in unanticipated purchases last month (2 clothing items, more bibs, breast pads, low-flow bottle nipples, a nipple shield, pacifiers...), and will cost us probably $60 in unanticipated purchases this month.  So, if your wife intends to breastfeed, maybe budget $100-$120/mo until that maternity leave is finished. 

At 6 mo old, ours will generate more clothing expenses because we have hardly anything bigger than 6 mo.  We'll have to figure that out.  Also, I return to work at that point, and we'll have to provide care at somewhere between $1,500-$2,000/mo.  But, assuming one parent loses their job, childcare could cease, so I don't bank those expenses in an emergency fund.

We're not doing monthly contributions to a college fund, but will probably do lump sum contributions to reduce our tax liability.  We intend to pay for college, but we don't feel a specific fund is necessary. 

In response to your specific questions about an emergency fund, I'd have 6mo of expenses on hand:  $4,700x6 = $28,200.
PLUS, I'd do an additional $120/mo for every month your wife is on maternity leave.
PLUS maybe an additional $300 because kids don't stop growing just because there's a financial emergency.


skuzuker28

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Re: Planning for Finances with first child due in July
« Reply #4 on: March 21, 2016, 11:37:29 AM »
The cost of the birth will vary greatly based on insurance coverage.  Our daughter is almost 8 months, and we have our second coming in July.  Here is what we have roughly budgeted (I don't track baby expenses separately):

Roughly $90/mo for formula (we get the Costco formula)
Roughly $40/mo for supplies (diapers and wipes.  We use disposable, also from Costco)
We have been fortunate to have a TON of clothing given to us for free, so we haven't needed to buy much.
Daycare is the real killer: $426/mo for three days.  We run most of this through a FSA, so our true out of pocket cost is closer to $300.

Right now we are working on getting our own financial ship in order, so no college fund at the moment.

MrsDinero

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Re: Planning for Finances with first child due in July
« Reply #5 on: March 21, 2016, 11:54:36 AM »
Our out of pocket medical expenses (induced but unmedicated birth) was about $1100.  Insurance covered about 80-90%.

Most of the clothes we have were gifts or hand me downs.  I have only had to buy items to fill the gaps (pants, long socks that don't fall off, etc).  We have enough clothes to get us until almost 1 year old, then we will have to start buying.

We go through about 1 can of formula a week (Enfamil/$26 (after coupon)). Right now we are the peak of formula, we are introducing solid foods, so her formula consumption is starting to decrease and will continue to do so until she is on solids 100%. 

We cloth diaper, but will use a disposable at night or when we are out and about.  We recently finished a box of 132 diapers ($32) in a month, which is a lot for us, but we spent a couple weekends visiting family, took some day trips, etc.  Normally a box will last us at least 2 months.

By and large our biggest expense is our nanny.  It costs almost twice as much as daycare, but for us very worth it.  We work from home and enjoy having the baby with us.  An added bonus, she is 6 months old and hasn't been sick, except for 1 ear infection after a plane ride. 


I'm a red panda

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Re: Planning for Finances with first child due in July
« Reply #6 on: March 21, 2016, 12:02:23 PM »
There seem to be a few things missing from your list of expenses.  First daycare:

I live in a medium cost of living area, and it was going to be $290 a week for us. This was not the most expensive option...  Also, the waitlists varied from 8 to 16 months, so I'd get on one sooner than later.


One thing I did was as soon as I found out I was pregnant and picked a daycare (so about 10 weeks pregnant) I started putting the daycare money into a Vanguard fund.  We got used to it being missing from our budget. And now we have a nice cushion in Vanguard ready if I'm able to get pregnant again, since we didn't end up needing it this go round.


Next - insurance premium? Mine more than doubles if I add a dependent to it.


« Last Edit: March 21, 2016, 12:04:14 PM by iowajes »

Chrissy

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Re: Planning for Finances with first child due in July
« Reply #7 on: March 21, 2016, 08:51:01 PM »
This is what we use for cloth diapering, and some of it was given to us as gifts:

-Pack of 6 OsoCozy Prefolds Unbleached, Size 1 ($13).  We bought 3pks so we could do laundry every other day instead of daily = $39.  Supposed to fit until she's 15lbs.
-Pack of 6 Thirsties Duo Wrap Snap, Size 1, PUL waterproof covers = $80.  Supposed to fit until she's 18lbs.  Could've gotten away with buying 4 individually for $52.
-Pack of 5 Snappis = $15.  We've only used 2, but will probably have two children in diapers at the same time, so that's fine.
-Thirsties Wet Diaper Bag:  $14.  But, we mostly use a bucket, so we could've skipped this.

TOTAL to start:  $148.

In order to cloth diaper through potty training we'd need another set of 18 prefolds through 30lbs ($20ea), 2 sets of toddler prefolds ($37ea) and 4 PUL covers, Size 2 ($13.25ea) = $187

Total lifetime cost for cloth diapers for unlimited children = $335. 
$25/mo in disposables for ONE child is at least $600 (24 months).

We use fancy, bamboo diapers at night and expensive, chemical-free wipes which is why we still have diaper expenses.  Whatever, not ashamed.  Only the best for our spawn, who just happens to be THE FIRST CHILD EVER BORN! 


« Last Edit: March 21, 2016, 09:01:31 PM by Chrissy »

JustTrying

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Re: Planning for Finances with first child due in July
« Reply #8 on: March 21, 2016, 11:09:38 PM »
I'm due in July with my first, and we looked at budgeting a bit differently than you did, so I'll tell you about it, just in case it helps:

I'm in the US, so I'll be taking 3 months of FMLA. Approximately 1 month of that will be paid leave, the other 2 months will be unpaid. We've been saving for my maternity leave in a special account for a few years, and we'll have about 75% of my normal take-home pay amount saved for those two months of unpaid leave. That's probably way more than we need, as (like many of us on these boards), I save a great deal of my take-home pay. But hey, I (like you) feel better having a good cushion in place!

Prior to now, we've had about 3 months of living expenses in a liquid emergency fund, but I've been working towards doubling that ever since we learned that I was pregnant. I feel like 3 months is more than reasonable for a dual-income couple with no children (because why in the WORLD would we both lose our jobs at the same time???). But now that we have a little one joining our family, I'll feel more comfortable with having six months of an e-fund at the ready.

I believe the main expenses for a baby are the "equipment" things that you'll likely buy before he/she is here (like strollers, crib, carseat, etc). If you lived in the US, medical bills can be high, but since you're in Canada you're saved from that! Once they actually arrive, they're relatively cheap, particularly if you're breastfeeding and not going to pay for childcare! I'd think you're main expenses would be diapers if you choose not to cloth diaper, and any clothing/equipment you choose to pick up. Once the kiddo starts eating solids, they don't really eat all that much till their older, and you can choose to do things like DIY baby food if you're trying to keep things on the cheap. In other words, I think a realistic figure would be $50/month, but since you seem to be a conservative guy, factor $100/month to help feel "safe."

Overall, it sounds like you're making great decisions and are in a good place financially to have a kid!

To answer your cloth diaper question, my stash (which should last until the kid is potty trained) was around $450, but that's relatively high because of my own indecisiveness. Initially I wanted to only do the easiest thing, so I bought a whole bunch of new Bum Genius All-in-Ones for over $300, which should fit from 12 lbs-toddlerhood. I thought we'd just do disposable till the baby grew into the All-in-Ones. But then I started to feel guilty about the landfill issue for those first few weeks/months, so I decided I wanted to cloth diaper from the beginning. So THEN I bought a bunch of pre-folds and covers (costing ~$100) to use with the newborn. Prefolds/covers are one of the cheapest ways to cloth diaper. But now I wonder if I'll love the pre-folds so much that I'll end up regretting my expensive Bum Genius purchase. ALL of my cloth diaper stuff has been bought new, so you can certainly cloth diaper for less than what I've paid. However, Bum Genius typically retail new for $20 each, and I got mine for <$15 each, so while I could have bought used for a bit less, I felt that the difference in costs between used and new-on-sale was not enough for me to want to buy used. If I could do it over again, I'd just spend the money on the prefolds and covers to try it out, and then decide from their what to do as the child got larger. It seems quite silly that I'm doing the more difficult type of diapering first when it's a newborn and I'm a new mom, but I wasn't willing to fork over the cash for all-in-ones for a newborn (they're too expensive to justify the cost with the short amount of time that they'll wear them, AND it seems that getting all-in-ones to fit right on a newborn is somewhat challenging as well, so prefolds seem to be a good choice for newborns). There is SO much information online about cloth diapering if you need more info - all of the retailers (Cotton Babies, Green Mountain, Diaper Junction) have info on their sites, plus there are blogs and youtube for more info.

MrsDinero

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Re: Planning for Finances with first child due in July
« Reply #9 on: March 22, 2016, 05:56:47 AM »


What does cloth diapers cost to get started?  I have read some reviews saying that to start cloth diapers it costs upwards of 800$?  is this true?

It depends on what you use.

I bought everything new but went the cheap route.  I have 4 FLIP covers and 1 Rumperooz ($14/each US) and about 30 diaper inserts (10 for $10 US) that we also use as burp, drool cloths.  For those we use Gerber.  We have 20 flat folds and 10 prefolds (gifts).  The flat folds were great until she was almost 3 months because she was so little.  The prefolds were ridiculously bulky.  Now we use the prefolds until they are gone then we double up the flat folds and use those as inserts.

All total I was able to get everything for under $100.


little_brown_dog

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Re: Planning for Finances with first child due in July
« Reply #10 on: March 22, 2016, 08:25:18 AM »
Re: cloth diapers

We use the thirsties snap covers ($14 on Amazon) and Osocozy unbleached prefolds ($13 for 6 on Amazon). We have 6 covers and 24 prefolds for a total pretax cost of $136. We registered for these for our baby shower, so family/friends purchased them for us. You don't need nearly as many covers as diapers (unless you have a blowout, chances the cover can last through a few changes).
« Last Edit: March 22, 2016, 08:28:16 AM by little_brown_dog »

Gin1984

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Re: Planning for Finances with first child due in July
« Reply #11 on: March 22, 2016, 09:31:01 AM »
Do you only get 3 months for maternity leave in the US?

We get 12 months, 9 of which are paid.  Thats why I had not looked into the daycare costs to heavily yet as that is still almost 18 months away
Yes, we only get three months unpaid, if we are lucky.  My husband and I work for the same company so we only get twelve weeks off together (including the time off before if I need it).  So it is likely that our next child will be in daycare at eight weeks, as our first daughter was.  Then you have people who work in companies with less than 50 people within a certain radius, they get nothing.

onlykelsey

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Re: Planning for Finances with first child due in July
« Reply #12 on: March 22, 2016, 12:12:36 PM »
WOW

What if you tell your employer you want to take a year off?  Do they have to protect your job for you?  Guarantee you work when you want to come back?

No, and no.

marcela

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Re: Planning for Finances with first child due in July
« Reply #13 on: March 22, 2016, 12:29:13 PM »
The only thing guaranteed (if you work at a company of a certain size) is that your job will be there for you if you take 12 weeks off. There is no federal law to provide any sort of paid leave and if you want to take time beyond the 12 weeks, you can be fired.

onlykelsey

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Re: Planning for Finances with first child due in July
« Reply #14 on: March 22, 2016, 12:30:39 PM »
The only thing guaranteed (if you work at a company of a certain size) is that your job will be there for you if you take 12 weeks off. There is no federal law to provide any sort of paid leave and if you want to take time beyond the 12 weeks, you can be fired.

If you work at a company of a certain size, and have for long enough and for enough hours weekly, and get everything properly documented, and have a risk-averse HR department.

marcela

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Re: Planning for Finances with first child due in July
« Reply #15 on: March 22, 2016, 12:33:46 PM »
The only thing guaranteed (if you work at a company of a certain size) is that your job will be there for you if you take 12 weeks off. There is no federal law to provide any sort of paid leave and if you want to take time beyond the 12 weeks, you can be fired.

If you work at a company of a certain size, and have for long enough and for enough hours weekly, and get everything properly documented, and have a risk-averse HR department.

Truth.

My company is considered very progressive because I can take up to 6 months off and can pre-purchase PTO to paid for my leave up to 6 weeks. My husband and I are thinking of having a child next year and I've been scrimping and saving up my paid leave to be able to cover 12 weeks of maternity leave. My family back in Brazil is horrified.

onlykelsey

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Re: Planning for Finances with first child due in July
« Reply #16 on: March 22, 2016, 12:35:53 PM »
The only thing guaranteed (if you work at a company of a certain size) is that your job will be there for you if you take 12 weeks off. There is no federal law to provide any sort of paid leave and if you want to take time beyond the 12 weeks, you can be fired.

If you work at a company of a certain size, and have for long enough and for enough hours weekly, and get everything properly documented, and have a risk-averse HR department.

Truth.

My company is considered very progressive because I can take up to 6 months off and can pre-purchase PTO to paid for my leave up to 6 weeks. My husband and I are thinking of having a child next year and I've been scrimping and saving up my paid leave to be able to cover 12 weeks of maternity leave. My family back in Brazil is horrified.

My Swedish family, as well.  That said, I actually get 14 100% paid weeks off here, although I know there's some opposition to people who take it all.  I work for an extremely elite firm, though, and this is clearly not what most women get.

I'm a red panda

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Re: Planning for Finances with first child due in July
« Reply #17 on: March 22, 2016, 01:31:52 PM »
WOW

What if you tell your employer you want to take a year off?  Do they have to protect your job for you?  Guarantee you work when you want to come back?

I cannot imagine the laughter that would result if I told my company I wanted a year off.

My company just this month announced 4 weeks paid parental leave, but before that I wouldn't have been guaranteed ANYTHING. My office isn't protected by FMLA because we don't have 50 people here (even though there are almost 2,000 in my company nationwide.) 

My company doesn't suck, so they do let us take 12 weeks FMLA-like leave, which is unpaid unless you qualify for short term disability, which is 50% pay for the time of the disability (which isn't the whole 12 weeks.)  During FMLA-like leave you are required to take any vacation time before taking unpaid leave.
They also offered an additional 8 week emergency leave, but during that time you lose all your benefits, so you have to find different insurance.

So my maternity leave would go like this (if I get pregnant again)
4 weeks paid (because my company rocks)
2 weeks vacation (cause I have it saved)
Possibly 2 weeks short term disability 50% pay (only if I have a Cesarean, because after 6 weeks you aren't considered disabled anymore), otherwise 2 weeks unpaid here too.
4 weeks unpaid leave.

Return to work.  OR document emergency medical condition of child that requires 8 weeks additional leave, hope it gets granted, seek out new insurance policy to pay for emergency medical condition of child.

Quote
The only thing guaranteed (if you work at a company of a certain size) is that your job will be there for you if you take 12 weeks off. There is no federal law to provide any sort of paid leave and if you want to take time beyond the 12 weeks, you can be fired.
I think the estimates I've read is that almost 50% of the workforce doesn't even get this because FMLA has so many exclusions. Though I imagine many work for companies like mine that do "FMLA-like" leave because they aren't total jerks.