The Real Deal on What it Takes to Financially Prepare for Your First Child
By: Danielle Greene
Having a baby is supposed to be one of the most exciting times in your life. For some it can be frightening, especially if you feel you aren’t fully prepared. I happened to experience both emotions. The latter part somewhat overshadowed the joy of my expected arrival. However, the feeling didn’t last long. Not being financially prepared for a baby can be frightening but it doesn’t have to slow you down. Here is my story: In my late twenties before I became a mother, I was somewhat living a life I had dreamed of—traveling, going out, sleeping in, started my own business and spending money on whatever my heart desired. Long story short – my lifestyle was great until I was let go from my full time job and pregnant. Two major things, at the same time = very frightening, but somehow I overcame the one obstacle and fully embraced the idea of motherhood. I had my business, Passport 7, that sustained me for a while and a great support system. Going through the experience of uncertainty allowed me to grow as well as tap into new resources.
The process of developing resources didn’t come easy. Hell, I didn’t even know where to start. My hormones made me feel like crying while eating a bowl of ice cream. In between the cries and spoonful of ice cream a light bulb went off. As millennials we are in the age of technology and everything I needed was right at my finger tip with a click of a button. I started to Google ways to improve my financial situation. I only had 8 months to prepare and a lifetime to go. Here is what I learned along the way:
Get a financial advisor
My financial advisor literally saved my life! Before sitting down to discuss my finances I learned I was living way above my means. I use to spend $200-300 a month just on my hair alone and there is no way I could do that being unemployed with a baby on the way. My financial advisor helped me literally cut bills in half and created a realistic budget. She introduced me to apps that would allow me to track my spending and credit score. A few of these apps included Mint, Credit Karma, and Credit Sesame.
Having an emergency fund is so essential. Whether or not you have a child, having an emergency fund available is always a plus. I recently read that 26% of Americans had no money saved at all and only 18% of U.S. workers felt comfortable that the money they had would be enough. I learned that emergency funds should be at least 3-6 months of your monthly expenses. I can honestly say I had some savings but not 3 months’ worth. So I had to learn the hard way. I began by setting a goal and creating a savings strategy. I analyzed my budget and determined how much I could afford to save each month. Once I established my emergency fund, things started to get better for me.
I am a huge fan of shopping with coupons or downloading the latest app just to save 5% on my purchase. I now hate paying full price for anything, lol. I am the one person that is holding up the line because I am going through my coupons at checkout – don’t judge me! Some people may call it old school but I call it schooling the system. When I shop I always look to see how I can save some money. Having a smartphone is one of the best things to have when shopping because you can do a quick Google search for a coupon or download an app to help you save. For all the new moms out there, find ways to stretch your money. You will be surprised how much you can save by being frugal. Heck, we all need a girl’s night out sometimes, so use that extra cash for a glass of wine. But make sure it’s during Happy Hour, lol – drinks are usually half the price!
Knowledge of the average cost of childcare seems to be the best birth control for many people who have considered having children, but can’t seem to wrap their mind around paying upwards of $1,000 a month for childcare. My suggestion to you is: do the research. Sometimes it pays to have a support system in place (mother, father, friends) who can help keep your child in order to cut cost. Childcare for many with young children is the largest bill. There are many services that offer childcare services at a cheaper rate. I understand that everyone is not fortunate to have a free babysitter, but if you do have one, take advantage of them and spend the extra cash wisely – or save it. ☺
At the end of the day, becoming a mother is the best thing that ever happened to me and I wouldn’t trade it for the world, but being a financially-prepared mother is even better.
Guest Post Submitted by Danielle Greene, Mompreneur and Founder of Passport 7