The results are in, and – congratulations – you are (or your significant other is) pregnant or you have just learned your adoption plans have come through! Maybe this is something you’ve been planning for years, or maybe it’s an unexpected surprise that you’re leaning into. Either way, your life is about to change dramatically in just about every way – from your values to your life priorities to how you budget your time and, of course, your money.
It’s unlikely that there’s a family on Earth that doesn’t intuitively understand that raising a child will majorly affect your bank account – the Washington Post recently determined that the total average cost of raising a child from birth to adulthood is over $300,000. That number may loom over our heads, but it’s also true that just as few people fully understand how truly expensive that is on a day-to-day basis until they’re in the thick of it, just trying to live their lives. Here are just a few ways to expect your finances to change now that your family is just a little bit bigger:
You’ve had the baby shower, and it was so much fun – all your friends and family came together to celebrate your life and your growing family, and they even all contributed gifts to ensure that you don’t start off empty-handed. You’re looking at a beautiful crib, the top-of-the-line stroller, and a dresser full of adorable baby clothes. That’s so much money you didn’t have to spend!
…until three months later, when your child has outgrown just about all of it. But that’s alright; “kids grow,” you tell yourself. So you dip into your savings for this very purpose and get a new wardrobe for your new baby. It even changes with the seasons, and you love it!
…until you hit the one year mark, and you’re buying more, and more, and more. You knew (and budgeted) for baby products being expensive, but did you budget for needing to replace them so frequently? Especially in the early years when your kid is growing like a weed from an infant into a toddler and into school-age, many new parents are staggered by how frequently they need to replace even the basic necessities, and it’s why so many parents love second-hand stores, parent-group clothing swaps, and other ways to save money on these short-lived items.
If you’re lucky, you’ve got a job that gives generous (or even any) parental leave as a benefit, and that can help you attend to your newborn’s needs for the first weeks, months, or even year of their life. But this is a big “if,” of course – according to the BBC, only 21% of workers in the United States are offered parental leave (in any form) from their employer, and even those who do have it will run out eventually.
So once you have to return to work, where does that leave you? Well, it leaves you – and most Americans – burdened with the new expense of child care, and you should anticipate it becoming one of the biggest line items in your budget. Care.com notes that over 50% of American families spend over 20% of their income on child care, with most spending over $10,000 per year. Simply put, child care can be an astronomical expense for most families, and your budget will likely need to be seriously recalculated in order to prepare yourself for that new cost.
Anybody who’s ever negotiated a job offer knows that financial calculations include more than just the dollars in your bank account. Benefits such as paid time off, sick leave, and more can factor into your professional life just as much as your base salary, and when you’re looking at bringing a kiddo into the world, expect these factors to play a role in your home life as well.
Parenting can bring all sorts of surprises, no matter how much you plan in advance, and that means your time is at a premium and may no longer be fully, well, your own! Is your wife planning on using parental leave to stay at home with the baby so you can go to the office and make money? Just wait until six months in when she’s begging you to stay home “just for one day” so she can get some sleep. Planning to use PTO for a staycation or vacation later in the year? That’s great, until your daycare unexpectedly shuts down for a week and you suddenly need to be at home. Been banking sick leave since you started? You’ll thank yourself once your kid starts spreading every bug through the house. These benefits are supposed to be for you, but once you start your family, you’ll realize what makes them truly so valuable.
We realize that this all sounds so daunting – and it’s true; parenting is a challenge unlike anything else and will push you to your limits. But it’s also rewarding unlike any other opportunity, especially if you can plan and budget in advance. You may not be able to anticipate every single surprise expense, but if you’re prepared for the big stuff, you’ll be in a better place to raise a happy, healthy little human being.
Need a little assistance getting your accounts in order for when the baby arrives? It’s alright; we all need help sometimes. At Spotloan, our simple online application process can help you qualify for the money you need, even if you have bad credit or need a same-day loan. All you have to do is go fill out our application to see if you qualify, and you could receive a decision within minutes. Fill out our application now!