By Jeannie & Daniel Rodriguez | Dr. Budgets
This month we wanted to write something from our perspective as brand new parents. Our daughter just turned three months old, and we couldn’t be happier (tired, but happy :-)). Since this is a money-focused blog, we want to share with you our 5 initial thoughts on having our first child as it pertains to money…
Plan Ahead. Before the pregnancy, we started to think about how to structure our health insurance and how much to put into our Flexible Spending Account (FSA). Timing obviously helps with this…we found out we were pregnant in September, and open enrollment was in November. We switched over to a lower deductible and lower out-of-pocket maximum health insurance plan and maxed out our FSA to take full advantage of what was offered through work.
Disability & Paid Family Leave. We live in California, which is very generous when it comes to maternity leave. Figuring out how to get disability and paid family leave benefits can be confusing though! There are no clear step-by-step instructions on how to obtain leave and it can be frustrating. For those who are eligible, you can receive up to four weeks paid short-term disability (State Disability Insurance or “SDI”) before the baby comes, and six weeks after (eight weeks if you had a cesarean section). The four weeks of pre-delivery leave can only be used before the baby arrives, so plan accordingly. Then, at the completion of SDI, you’re eligible for Paid Family Leave (PFL) to bond with your child. You can get six weeks PFL – and if your significant other pays into SDI with his/her job, then they’re eligible for six weeks paid bonding time too! Also, you don’t have to use the six weeks consecutively… you can use chunks of time up to a year after the baby’s birth day.
Something neat that we learned was that you can transfer your benefit amount from the Visa prepaid card to your bank account automatically! Since things tend to change often, your best bet is to Google instructions on how to do this. For us, receiving this money allowed us to spend just over three months with our newborn daughter, and that time with her and each other was priceless.
Discount on Hospital Bill. It takes a while for the hospital and insurance company to work out the bills on their end before you get a bill for what you owe. And, with everything going on with having a newborn at home, the bills might keep getting pushed to the bottom of the to-do list (below “keep baby alive” and “brush teeth”). If you don’t pay your bills right away, don’t be surprised if you get a call from the hospital billing department about payment. If you do hear from them, be honest about your situation. They might be in a position to offer 20% off your bill (which they did with us!) and/or set up a payment plan.
Amazon Prime. Amazon Prime was convenient before having a baby. If you are unexpectedly at the hospital three weeks before your baby is due, then Amazon Prime becomes a savior! If you are an Amazon Prime member and create a registry on Amazon, you get 15% off eligible items remaining on your registry. As labor began, we used the one-time 15% off discount to order the things we needed for the baby from the hospital room. When we arrived back home a few days later, we had a mountain of boxes waiting for us on our front porch! Also, with Amazon Prime you get free two-day shipping (and, sometimes, free ONE-day shipping), so we didn’t go crazy buying things we weren’t sure we would need before the baby came – we knew that if we needed an item, it was only a few clicks away. This saved us money by limiting what we bought before the baby arrived.
Cloth Diapers. We love cloth diapers! They are cute, cost effective, and eliminate a ton of diapers from ending up in a landfill. Yes, it is a little more work having to wash and dry them, but well worth it for us. We estimate the cost savings here to be minimal the first year (we had to purchase the diapers after all), but upwards of $400 for the second year, and potentially thousands for the future child(ren) we wish to have.
Those are our 5 initial thoughts on having our first child. If you know someone who is pregnant or just had a baby and wants some coaching on how to adjust their budget after this big life change, have them contact us or schedule a complimentary consultation. Happy parenting!
- Published in Family
By Daniel Rodriguez | Dr. Budgets
A great tip for saving money with kids is one I learned firsthand from my mom: the concept of a wish list. We didn’t have much money growing up, so this grew out of necessity. It works like this: when you are at the store with your kids and they want something, tell them it will go on their wish list instead of telling them “no” or buying them what they want in the moment. You can then refer back to this list for birthday and Christmas gifts, and once in a while get something from the wish list out of the blue or because they did something right. The spontaneous gifts will do two things: they will feel special AND they will know that the wish list isn’t just a way for you not to buy them anything ever! This will save you money because you won’t be spending money on your kids just to appease them every time you go to the store. Not only will you be saving money with kids, but you will also teach them discipline and fiscal responsibility through delayed gratification.
What if you don’t have kids? This tip can also work for adults! I have my own wish list that I build over time (I guess old habits die hard!), and then I use it to determine rewards for myself when I achieve certain goals (see here for an example). It is so much more meaningful to buy something because I accomplished a goal, rather than just because I wanted that thing in the moment. The other side benefit of creating a list (whether for yourself or your kids) is that some of the things on the list fall off after some time because you may not want them anymore or your needs may have changed. I have used this system to save lots of money over time.
What do you think of the “wish list” concept? Let me know in the comments section below!
- Published in Family
By Daniel Rodriguez | Dr. Budgets
This month I have compiled five ways to save money on kids that you can start thinking about after you get pregnant. In full disclosure, my wife and I don’t have kids yet, so this list is the result of suggestions from readers, clients, family, and friends. I found these tips very helpful…I hope you do too!
Travel. One of our readers wrote that he and his wife moved up a few of their trips before their kids turned two, thus saving them money on airfare. Airlines typically offer parents of children under 2 years of age the opportunity to hold the child on their lap. According to a USA today article tickets for lap babies are generally free or require payment of airline fees and taxes only on domestic flights, though a small ticket fee is commonly included on international flights. In addition, some airlines, such as Southwest, give a ticket discount to infants traveling in a FAA-approved child restraint, such as a car seat, while other airlines, such as United, offer complementary bassinets for use on international flights with an infant under 6 months of age. So, see how many destinations on your wish list you can visit before your child turns two. Then, to balance out your travel budget, take a break for a few years.
Costco. A friend of mine saved a bunch of money on diapers and baby wipes by buying them at Costco. She also mentioned that you can purchase high quality baby formula at a discount. These tips alone can save you hundreds (if not thousands!) of dollars per year. Another tip from a friend was to use reusable diapers instead of disposable ones. Laundry will be more expensive because of the extra loads (pun intended!), but you are likely to save money by doing this. These are all things you can think about while you are pregnant to prepare for the increase in expenses after junior is born. Bonus Tip: Since my dog is basically my “baby” right now, I thought I should mention that I save about 50% on the cost of dog food for my boxer by buying it at Costco. Just some food for thought.
Babysitting Co-Op. This one takes more effort, but with the high cost of daycare, the savings here could be huge! As soon as you get pregnant you should start thinking about who can watch your baby. Is there a family member who would love to help out once per week? Who do you know and trust who also has kids who you could form a baby co-op with? Click here to learn about babysitting co-ops. Lots of parents spend thousands of dollars per year on babysitting and daycare. Think about what you can do to avoid or reduce this expense.
Pre-Birth Shopping. This tip came in from another friend of mine. He told me that it is very easy to overspend on your soon to be born child (especially your first!), but it is unnecessary. Friends and family who are overjoyed with your news will often shower you with gifts for your baby. So you will want to wait until the gifts stop rolling in, then go out and buy what is missing.
Buying Toys. You often see kids with so many toys, but if you observe them carefully they are typically only playing with a handful of them. So think about the concept of less is more. Having fewer toys may actually benefit your kids. If your child receives a new toy consider having them get rid of an old toy. You could also set up a toy exchange with other parents. This exchange can also work with clothes because often kids grow out of their clothes so fast they don’t get very many wears out of them. As your kids get a little older and they start asking for things at the store, tell them it will “go on the list,” then refer back to this list later for gift ideas. Check out my blog post later this month for more on this.
So those are my five ways to save money on kids that you can start thinking about after you get pregnant. If you have any tips that you would like to share, please do so in the comments section below.
- Published in Family