There is just a little more than a month left until we get to meet our new addition! While we have most of what we need for our little girl material-wise, we still have a bit of planning to do. There are a lot of things we now need to take into consideration with our little one. Here is a quick review of what we’ve been looking at.
Of course, having a baby costs quite a bit of money. In the first year alone, parents can spend up to $2,000 on diapers. Just diapers! However, that isn’t the only thing you’ll be spending money on. So, we’ve been trying to plan for some of the following upcoming expenses…
- Delivery hospital bill: Around $5,000 out of pocket
- Health insurance for the baby: Around $300/month
- Clothing (new monthly budget item): $100/month
- Car registration and taxes: $500
- New computers for home office: $3,000 total for two
- Life insurance: $70 per month
- Dental work: TBD
- Rental renewal: TBD
Looking at the rest of the year, we have some hefty expenses coming up. First, my insurance has a maximum out-of-pocket cost per year of $6,000. I have already paid a little over $1,000 out-of-pocket for prenatal care, so when the bill comes for the hospital stay for delivery I expect to pay around $5,000. We will likely make payments on this.
We also need to renew the car’s registration and pay taxes in North Carolina in August. This will likely cost around $500 total. We will want to prep for this cost annually. Another one-time expense we are prepping for is the cost of two new computers for our home office. Because we are both working from home, it is important that we have reliable machines to work on. Right now, we both work on rather spotty laptops. Better performing machines will open more opportunities for us.
Two more one-time costs will be dental work (I desperately need some teeth removed and a deep clean) and our rental renewal. The exact cost of these has yet to be seen.
Lastly, we have some new budget line items to add to our monthly expenses. We will be getting life insurance for ourselves. Now that we have a child, it is important to us that we be prepared in case anything happens to either of us. We also need to get our child health insurance, which will likely cost around $300 per month. As you know, kids grow fast, so we are going to add clothing to our monthly expenses as well.
Planning for the Future
There are a few other financial things we’ve discussed in preparation for the baby as well. Both of us would like to send her to a private school. The public schools in our area aren’t the best and we want her to have a good education. This will cost around $6,000 per year in elementary and climb through middle and high school. We’ve been looking at educational savings plans to help us mitigate some tax liability for paying for her education.
Both of us are looking into starting other savings accounts and opening IRAs for the future as well. Something about having a baby has put us into full preparation mode for retirement and savings. We will start a family vacation fund, Roth IRA, first home fund, and savings account for our little one too.
Main Debt Focuses
Now, let’s shift our focus to our remaining debts. The biggest thing we will be focused on paying off now is our car. The monthly payment on our vehicle is $488. If we were able to eliminate that monthly payment, we will be able to have a lot more wiggle room in our budget and improve our finances significantly. Once that is paid off, we can focus on some of our other smaller debts and begin saving for a down payment on a home.
That’s a lot to think about at once and, sometimes, it feels a little overwhelming. However, both of us are looking forward to a bright future for our family.
Readers, how did you financially prepare for your firstborn?