Did We Budget for Baby Costs Correctly?

by Kevin on July 21, 2013

I’m one of those weird track every single thing on a giant spreadsheet and give every dollar a name kind of guy. Whenever a significant expense pops up that I didn’t anticipate not only do I get a little frustrated with myself, but I create a new category to handle that cost in the future (assuming it is likely to happen more than once).

Having a category for everything from car insurance (paid every six months but we pay into our category monthly for it) to my annual eye exam and getting contacts just helps me sleep better. It avoids the “robbing Peter to pay Paul” problem where you start shuffling money from one category that has money to one that you didn’t see coming.

We have been diligently setting aside money every single month in anticipation of bringing a child into this world.

I am happy, exhausted, and thrilled to report that happened on July 12th. My amazing wife and handsome son are healthy and doing well save for us parents not getting any sleep.

Now that things have stabilized a bit and we’ve gotten a little bit past “just survive the next three hours”, I jumped into our budget spreadsheet to update everything. (I was starting to develop a twitch for having gone so long without looking at it. Or maybe that was the lack of sleep.)

The Satisfaction of Successfully Anticipating Baby Costs

I’ve spent more money without clear thought in the last week or so than I ever have. I know we went to the grocery store in a daze, and I know I swiped my rewards credit card, but was that all groceries? Or did we have some cleaning supplies in there too?

As I was updating I noted I needed to reconcile the “baby medical” and “general kid costs” categories. I told you in the past how we started saving up for major baby expenses and then how we would transition to covering the month-to-month costs.

Long story short we knew we were going to need a pile of money for an unknown expense in the future. We asked around at what to expect in terms of costs like outfitting a nursery and so on, but really you are doing educated guessing at best.

I’m of the mentality that I’d rather at least make an attempt to make an educated guess and haveĀ some kind of money set aside than to do nothing. Even if you only set aside 50% of the needed money that is a lot better than having zero set aside.

So imagine my surprise when it turns out we were pretty much spot on with the costs. We actually had money left in the general costs fund, and we were a little over in the medical costs. When you combined the two it came out with some money left over rather than being in the red.

Stability Provided Through Planning

Bringing a child into this world is truly terrifying. You’ve got risks to Mom during pregnancy, labor, and delivery. You’ve got risks to baby during that time plus keeping him alive … you know… for the rest of time. You’re in an unfamiliar location with monitors and IVs and all sorts of crazy things hooked up to you or your spouse.

Planning ahead, even if partially correct, takes that extra layer of stress off of you. I can’t imagine going through this while being worried the entire time about how we would pay the unknown hospital bill.

A ounce of prevention is worth a pound of pain. We started saving for this event for aboutĀ six years. We saved a small amount every single month to build up to how much we thought we would need. I find this much easier to deal with than “Surprise! You have 9 months to save up thousands of dollars!”

It’s just like any other financial problem. Take retirement. You can wait until you’re 50 to start saving for retirement but you’re going to have to set aside tens of thousands of dollars every single year just to have a decent retirement.

Or you could save just a few thousand dollars every single year starting at a young age and end up with millions.

There is stability provided in planning ahead. Less panic. Less fear.

More prevention, less pain. Which would you rather have?

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