I haven’t written about this yet, because I needed to sort through some feelings (of rage) first. But I think I’m ready now!
A huge part of getting ready for a baby is figuring out money, and that is very, very stressful. We’ve been cooking – and reheating – our budget plan for months now. But I think we’re finally close to having things figured out.
The biggest thing that threw a wrench in budgeting is that Kyle (and I?) bought a new car. Like, brand new. And really fancy. And expensive. And – if you ask me – totally unnecessary. But we made the decision together. Even if I felt pressured into it, I was a participating decision-maker. And it happened.
Anyway, I was/still am a little miffed over the whole experience. But in the end, Kyle is super happy, and there may actually be budgetary silver linings to the whole transaction that I didn’t see at first. For example, we took a portion of the trade-in value from his old car as cash and were able to pay all of our credit cards down to zero!
Considering the massive car payment we took on, erasing that high-interest debt – and the associated monthly payments – is especially important for keeping a balanced budget. And with the upcoming arrival of our new little baby – AKA two kids in daycare and maternity leave to pay for! – balancing the budget was going to be a challenge no matter what. It makes no difference whether we’ve got credit card payments vs. the car payment. It is just going to be a battle.
The good news is, I actually feel pretty optimistic about our finances! It looks like things will mostly balance, most months, which is the same story as before we took on the car payment. The added bonus of our revised situation is that all of our high-interest debt is gone, so overall our long-term finances make a lot more sense. We’ve got essentially the same dollar amount going out every month to pay debts, but because the interest rates are lower, a higher proportion of that money is actually paying down the balance as opposed to lining the banks’ pockets. This means our remaining debts (house, cars, medical bills) will disappear much faster.
Additionally, having all of the space on our credit cards means that we can be our own back-up plan, should things go awry. We’ve literally got thousands of dollars at our disposal for emergencies, which is comforting! Because there are bound to be emergencies occasionally with two kids, a house, and two cars!
My savings plan over the next 5 months before baby is strong and looking good for having enough to cover maternity leave. And with switching to a more affordable daycare, we should be (close to) OK after maternity leave as well. The only baby-related budget item we haven’t quite figured out yet is how to pay for the baby “stuff” we need without tapping into those credit cards. Luckily, since this is the second baby, the list of “stuff” isn’t very long, so I’m sure we’ll be able to figure that out as well.
I remember how baby-budgeting felt when I was pregnant with Lewis, and even with the insane car purchase this time, I actually feel less stressed and better prepared this time around. We have better health insurance, higher income, a more refined plan, and fewer things to purchase. So while it is still stressful, there have been far fewer tears and meltdowns, and I feel positive that our little family is going to weather the financial storm of a new baby much better this time around. High fives for everyone!