It’s certainly a bit taboo to talk about money and kids in the same conversation. Having a baby is something beautiful, something that some of us will choose to do sometime in the future. There certainly seems to be a little bit of an air of mystery around having a kid. The benefits are definitely known, but the costs, both time and financially aren’t as known. Something tells us that it’ll all work itself out in the end, but what’s the harm in asking a few questions to learn more and hopefully dispel some of the mysteries? I recently sat down with a friend who recently had a newborn. Along with his wife, this was their first child and they couldn’t be happier. Andrew was kind enough to share a little insight into what it was like to have a child, as well as what kind of costs they faced.

Planning with the spreadsheets

I was a little surprised, although perhaps it’s just because I’m super Type A, that Andrew and his wife didn’t go into having a kid with any sort of detailed financial plans. Knowing myself, I’d probably have multiple spreadsheets and a super involved plan, charting out savings before the birth, savings after the birth and investing for YMF Jr. Andrew mentioned that he and his wife are pretty frugal to begin with, and that he knew that their frugalness would continue with their newborn. Andrew earns what he described as a ‘typical young professional income’, and after discussions with his wife and looking into the cost of daycare, described as ‘expensive’, they actually decided to go from being DINKs (Dual Income No Kids) to SIOKs (Single Income One Kid). He did say that when his wife got pregnant, that they started a ‘baby fund’, meant to provide in the instance that complications or unexpected expenses popped up. It was only a couple thousands dollars, and he said that they didn’t end up using all of it.

Having the right healthcare

If there was one takeaway from my talk with Andrew, he wanted me to stress the importance of having good healthcare. He mentioned that his company offered great benefits and that he couldn’t have been happier with the coverage his plan provided him. Believe it or not, he said the entire maternity care (all 9 months) only cost him his $250 deductible. Thankfully he said that his wife did not experience any complications and that his son was born healthy, but that’s not everyone’s experiences. Andrew mentioned instead of planning with spreadsheets to do your homework on your health plan. Having a good health plan will go a long way as complications both during and after birth can get expensive. Whether this will involve looking a little deeper into the choice between two plans when it comes time to renew your company’s health plan or diving into the nitty gritty of what your current plan offers, it certainly will be worth your time. Figure out what’s covered and what’s not covered, and try to maximize the former and minimize the latter.

Expenses, large and small

What was probably most surprising about my chat with Andrew was how inexpensive his monthly expenditures were. He mentioned that they got pretty lucky from their baby shower and that they got a TON of gifts from family and friends. Aside from the gifts, the big expenses they had were: stroller, crib, co-sleeper and a car seat. They dipped into their baby fund for these. Other than that big expense and thankfully having good health insurance, Andrew said that monthly costs were pretty low. His son grows pretty fast (as all babies do), and he gets a lot of hand-me-downs from friends/family. Diapers are the biggest monthly expense and average around $50 or so.

It is what you make of it

It dawned on me during our discussion that having a kid is similar to any other expense or big decision that young professionals face. As with most things in life, there is often a lot of room between doing it on the cheap, and the expensive side. There’s certainly always going to be an expensive option, whether a $3,000 crib or fancy designer baby clothes. Same thing with buying a car, house, or going to grad school; you can always find good values and these decisions don’t have to break the bank. Andrew mentioned that he couldn’t think of a financial reason not to have a kid, and that they’ve been able to thrive on one income. Their newborn hasn’t broken the bank yet and it’s been an overall great experience!