The Finanical Effects of Transitioning To Parenthood
When we sit down and think about it, our transition to parenthood has really had a snowball affect on our finances. While before our child I would have easily recognized the expenses of a hospital birth, diapers, formula etc, with a baby there have been a lot less obvious effects on our finances.
Loss of 1 Income- My wife did not pursue a full-time position when we returned from China. Since we were expecting and we both believed it was very important for at least one of us to stay home with our daughter, my wife decided not to look for a full-time teaching position when we returned to the US.
Bigger House, Bigger Mortgage - We were living in a 2-bedroom townhouse whose monthly mortgage payment was only about 2/3rds what we are paying now. We thought our townhouse wasn't big enough to raise our family and felt a strong desire to purchase a family home. We bought a bigger house and with it came a much bigger mortgage, bigger utilities, more maintenance.
Time is More Valuable -With our child we have a lot less time available (if you can't tell by the reduction in blog activity). The value of our time has gone up significantly and as a result we are spending more money to save us what little time we can. Some examples include our robot vacuum cleaner and automatic shower cleaner.
Furniture/Decor - We setup a nursery in our home complete with furniture including a crib, changing table, glider, baby swing, bouncy seat. We also had to get all the essentials for babies these days including Pack & Plays, breast pump, car seat, strollers, and other things to keep our baby busy. My wife did a great job keep costs down by buying almost everything used at consignment sales or on craigslist. One of the few things we did buy new was our glider rocker at significant discount.
Family Car - Our car ended up dieing on us last year and we had to quickly buy a replacement vehicle, but we upgraded to a SUV to accomidate our growing family.
Baby Supplies - Baby consumables have been a hard expense to measure because then tend to get mixed in with grocery purchases, but they have been a constant expense for us. Diapers, baby wipes, formula, baby food, baby clothes, and toys need regular replenishment.
College Savings - Something I put a high importance on is building a sizable college savings fund. At one time I had a lofty goal of putting $5,000 away for each child of mine when they were born. That didn't happen, but we managed to put about $2,000 away so far in our 529 plans for our daughter. We also setup regular contributions of $75/mo and hope to grow that to a larger monthly contribution as our finances permit.
Heating/Cooling Costs - Probably a small drop in the overall bucket, but we have nudged our thermostat down in the summer and higher in the winter to make our baby more comfortable. Hopefully once our daughter is a little older we will adjust our thermostat back to more cost-conscious energy usage, however it has certainly had an impact on our current utility bills.
Medical Costs - The cost of a hospital stay for the birth and other associated medical expenses was obvious. The cost of medical insurance for not only for our daughter, by my wife (since she no longer has insurance through her work) and the regular doctor checkups was not.
Some other areas that have directly affected us yet, but I suspect will are additional life insurance, babysitting, and other expenses as our child gets older.
Overall the effect on our finances has been transformational. Almost every area of our budget has been affected by the addition to our family. When I stop to think about it I really wonder how folks who haven't built up savings as we have can cope with these adjustments. My wife and I are very fortunate to be in the position we are in.
Related in Children:
Toyota Sienna 2014 Purchase Breakdown (Jul 20, 2014) Back at the end of March my wife and I purchased a new 2014 Toyota Sienna LE. I found it hard to get good benchmark prices online so wanted to share our cost breakdown. We purchased a 2014 Toyota Sienna...
Car Purchasing Decision: Minivan or Not? (Apr 07, 2014) My wife and I are actively working on buying a replacement car. My 1998 Nissan Sentra is currently having some problems (significant oil leak) and I've decided that I don't want to continue to invest in the car since we...
North Carolina 529 College Savings Plan Contributions No Longer Tax Deductible (Nov 27, 2013) For those that live in North Carolina like myself, there was a fairly quiet change pass by the NC general assembly this year that removes the state tax deductions for NC529 contributions effective January 1, 2014. For a married couple...