What’s the 7-letter word that scares after becoming a dad?
If you see a father who looks all happy and satisfied in his life, don’t let it fool you. Just go to him, and whisper “finance” in his ears.
Two things are gonna happen next: Either the father will go on an unending rant, or – worse – he’d breakdown.
When I had my first child, I was happy with the financial arrangement I made. I had it all planned (at least I thought so!). My wife and I took a pen and paper, sat down, and planned our spending till the last dime.
I was told that parenting is expensive, and I took that on the face value and prepared for it.
But, here is the thing:
The kids shit on your financial plans faster than they shit in a diaper
I was the happiest to hold my kids in my arms, but that gleeful story is for some other day.
Today, it’s about a truth: Parenthood doesn’t burn a hole in your pocket. It f***ing burns the bank.
I’d planned on getting everything my mind could fathom, but would still fall short on a thing or two at the end of the day.
Diapers, food items, clothing, accessories, and healthcare are some of the expenditures that take a heavy toll on your pocket if you let your guard down.
My first child taught me a lot about the monetary side of being a new parent. So, when I got the news, “Hey, you are becoming a dad once again,” I found myself more prepared than before. ( P.S: Inside I was a bit nervous.)
I was the manifestation of the metaphor: fool me once, shame on you; fool me twice, shame on me
But still, you can’t have a foolproof financial plan for your child’s birth unless you have a million-dollar stashed somewhere, or you are the next Jeff Bezos.
This doesn’t mean you can’t try…
After going through a galaxy of daddy troubles, I feel there are a dad should do financially to scamper through the early years of fatherhood.
If you have figured out an insurance policy and have bought the best childcare plan, even then, there is no harm in going the old-school way and making an emergency fund.
I had a budget plan for my first child, but as I said, “It rarely went according to my plan.” So, when my next child was due, I put two hats of a finance manager, instead of one.
Now an experienced dad, I asked myself:
- What one-time expenses could we expect after having the child?
- What recurring expenses would the child incur?
- What is the total amount of our current monthly expenses?
- If our current monthly expenses are high, what expenses could we cut down?
Let me tell you, once you have a budget, you would have to stick to it. There is no point in making the budget if you end up getting wishy-washy later on.
I understand that resisting the urge to buy your favorite brand of watch will give you a tough time. However, nothing is as wrong as getting caught off-guard on a rainy day!
My first few weeks after becoming a dad were all about taking a series of trips to the pediatrician’s office.
So, if you are all set to grow your family, don’t miss out on reviewing your healthcare plan. Bring it under the spotlight and review the options it would leave you with after having a child.
Most importantly, put your wife’s health insurance plan under the microscope. If the plan doesn’t give adequate coverage for maternity expenses and delivery costs, consider switching to better plans.
Fortunately, having a baby qualifies as a ‘life event’ and would let you add the little one to your healthcare plan.
It took me around 35 days to enroll my child in my healthcare plan. So, you could expect a typical enrollment period to be anywhere between 30 to 60 days.
When a few months passed, and I started getting the hang of managing finances as a dad, I went the extra mile and acquired two other insurance plans: disability insurance and life insurance.
All in all, consider counting on these insurance plans if you’re planning on making the financial situation water-tight.
When I had my first child, I went broke. I had a financial plan, and savings, but still, the expenses of the baby trampled all of them.
Also, we lost a source of income. My wife couldn’t go to work, because of course, how could she naturally?
So, it was like, our expenses went up x2, but income got half.
So, one of the big questions you need to ask yourself is: Can my house survive on a single source of income? or my family needs another source of income.
If it couldn’t, and both you and your wife need to work to bear the expenses, then opting for daycare is the correct option.
Daycare offers the added benefit of providing your child a chance to socialize and engage in a variety of healthy activities.
In contrast, if your budget allows, you can consider hiring a Nanny. Even though it is an expensive option compared to daycare, it has the edge when ‘attention’ is the most critical consideration for you.
Me and impulsive buying, bonkers!
I hate to admit that I made some foolish buying decisions, but I take solace in the fact that I am not the only one. Ha Ha!
Let me tell you that the cost of diapers alone is going to startle you. I was!
Also, add the cost of baby food, accessories, toys, clothing, etc. These things are small in size, but damn… they cost a lot.
In the beginning, I could never locate the drains in my wallet. With time, however, I honed up on the art of spending without breaking the bank.
The few spending hacks I learned as a father are:
- Avoid buying baby clothes far in advance. The little ones could shock you with unanticipated growth spurts. They grow out of clothes very quickly. So, no bulk buying. Period
- Look for all-in-ones. Chances are you would save some money if you go for all-in-one deals instead of buying the baby items separately.
- Try to prepare baby food on your own. Sure, the idea of having processed food sounds good, but it adds up significantly to the budget. So, take out your food processor, and try to prepare the food at home.
- Throw a baby shower. Why? Hint: gifts. It won’t hurt if you can get a few things as a present. Wink wink!
You’ve got this!
Planning finances is as important as planning a baby. If you don’t act wisely here, you might have to take out a loan in a few months (nope, I didn’t experience it, or did I?)
Jot down a foolproof financial plan (yes, it’s never foolproof). But, it has to be robust enough that an unexpected expenditure or two don’t throw you off the course.
So, heads up: before planning a baby, discuss the financial considerations with your wife. Take a pen and a notebook, and get down to business.