Baby Changes

Over the past few months I've read a lot about getting your finances ready for baby and we'll be making so significant changes to where our money goes. Most of these changes will be temporary- but help us handle any big changes after the baby. Each month I'll pay the required things- mortgage, monthly credit card bill, car payment, student loan, utilities and what we set aside for insurance. In a perfect world I'd pay these all directly from my husband's check but I don't think that will be possible again until June/July. Any additional funds that are left (including my paychecks) will go to new sub account titled baby stuff and oh baby.

Baby stuff is for (shocker) the things we'll need to get for the baby. I'm giving us a tentative budget of $3000 for gear, including the crib, mattress, car seats, and clothes that we aren't otherwise gifted at the baby shower. I'm hoping that our friends with older babies will want to give us their used stuff so we don't have to spend anywhere near this amount.

Oh baby is the baby related emergency fund. A few days a week I listen to Dave Ramsey at lunch. Anytime someone says they're having a baby he tells them to pile up cash (what you would send to debts otherwise) until the baby gets here. If everything goes fine make a huge debt repayment. If there's a problem for mama or baby you have the cash to help deal with it. I was on the fence about this initially but then I got a survey from my HR department. They're currently shopping for next year's (July 1 for us) rates. Right now I have an HMO and delivering the baby would be $1000 but the survey made it seem like everything, including high deductible HSA plans, was on the table. Since I'll deliver within 2 months of our new plan start I want to make sure we're covered if the costs change drastically.

Any money in the checking account above the regular bills will go into two funds or the low months fund. It will be 30% to baby stuff, 30% to Oh baby, and 40% to the low months fund. Once we get baby stuff to $3,000 I'll reevaluate the percentages. Last year I optimistically thought $3,400 would get us through the low months. This year I want to aim for $10,000. I won't be able to work the extra hours over the fall/winter and maybe spring. I also don't want to worry about money while we're getting to know the baby.

The only bill we will pay more that what is actually due on is my student loan. When I switched to reduced payments it was with the understanding that I'd be paying the original amount each month to avoid extending repayment.