After Baby Budget
The first three months are the most costly. After all the items are purchased, there are still those reoccurring expenses like formula or diapers and wipes. If you have money left over from your Pre Baby Budget its time to create our Child Care Emergency fund. Its best practice to purchase the reoccurring expense out of the 30% variable section. Trimming back your fixed expenses could cover these. If not the Child Care Emergency Fund would. The Child Care fund should have a minimum of $1,000 just like your regular emergency fund.
One thousand dollars is more than enough to cover child care expenses and small enough to return the funding. Going past this amount would hither other purposes you have for your savings. My other reasons to save, a House and or paying off debt. You can still work towards your other goals even though your situation has changed. Think of these funds as two buckets, both the same size.
If some of the items spill out you fill it back up. That being said, I don’t want you to take from your regular emergency fund to fill this one. Wherever you are with it, place a pause on it, and start filling up the Child fund. Once the child fund is fully funded, continue to fund your emergency. If both are funded, stick with the usual percentage of 15% for your savings account.
An example of your After baby budget
- Medical Insurance
- Life Insurance
- Car Insurance
- Rent/ Mortgage
- Renter’s or Housing Insurance
- Property Taxes
- Cable /Internet/ Phone
- Personal Spending
- Household needs
- Clothing/ Shoes/Toiletries
Savings / Sinking Funds
- Childcare Emergency Fund
- Emergency Fund
- Car taxes
- Seasonal / Birthday Gifts
What is considered an expense for the Child Care fund?
Do you have to go for an emergency diaper run and your variable expenses are tapped out? Then this would come out of here. Daycare expenses and or Nanny expense, definitely out of this fund. Medical expense for your baby, that comes out of your sinking fund. If the sinking fund is not enough, and it becomes an emergency expense. That is when you tap into your emergency fund.
Within the first thirty days of delivery, your insurance should cover the delivery under you as the insured. After that, your child should have its own insurance. If you are employed or at least your partner is, speak to your insurance company to make the transition. Most of your medical expenses should be covered in case that does not happen. Make arrangements to pay down the bill with your sinking fund if you can’t afford to pay it in full.
And now we rest…
Congratulations so you are a new parent and the budgeting is all planned out. No one has ever said being a Parent was easy, it’s just rewarding. Don’t forget to enjoy every minute of it!! I hope that my strategies have taken the mental stress off of Money. It’s best that you always have a plan even when things could be unexpected. Good luck on your journey!