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Before I had kids, my wife and I were pretty organized with our money (we split most of the bills down the middle and handled our own personal expenses). Now our baby is 9 months old and we are all over the place. It’s partly because we’re spending money on a bunch of new things – diapers, baby care, baby junk that I order in the middle of the night when I remember we’re running out of wipes or anything. whatever. But I’m having the same difficulty budgeting as I used to. My credit card bill is a monthly mess. Technically we could afford it, but we saved nothing and it all just felt really disorganized.
I feel like we’re making little money and I hate that feeling. But at the same time, I don’t really have enough bandwidth to think harder about my spending. Before we had a baby, we budgeted for the expected expenses related to the baby and were very intentional about it. Now that’s almost funny, and it worries me. How can I be more proactive about managing my spending and getting everything back in control?
Full disclosure: I relate to your question almost too well. I used to be the one who tabulated my expenses and made my credit card payments weekly because it felt as clean and as good as brushing my teeth. I have a 14 month old baby now, and I can’t tell you the last time I looked at my Visa bill. I wish I felt less sloppy and got more done, but trying to incorporate my new life as a parent into my old budgeting methods was like waving a dollar bill over a freight train. So when I reached out to the experts about your letter, I wanted guidance for myself as well.
We’ll go over their specific tips in a minute, but first, I think it’s important to accept that you may never go back to exactly how you managed your finances before. Personally, parenthood has changed my attitude towards money in huge and contradictory ways. On the one hand, I am currently financially responsible for someone other than myself, and that profoundly affects my decisions. On the other hand, I’m not nearly as concerned with money as I used to be. Certainly, I care about, but I lost control to be meticulous about it. Sometimes I miss a leaner, more polished version of myself, but I’m not that person right now, and that’s okay.
“My best piece of advice is to have empathy for yourself during this period,” says Megan McCoy, a financial therapist, parent, and professor of personal financial planning at Kansas State University. the beginning of the parenting process. “It may take a few more months or even a year, but things will get easier, you will have more downtime and sleep, and you and your partner can spend time making sure Make sure your finances are in good shape.”
Meanwhile, you don’t want money to contribute to the anxiety and uncertainty that parenthood can bring. If you’re like me, it can be a little scary to feel your spending is out of control. So you need a plan – but a loose and forgiving plan will make your life easier instead of giving you one more thing.
To get started, make sure you have some emergency savings that you can access in a short period of time; The last thing you want is a large unexpected bill (or even the threat of one) that could land you in reverse credit card debt. Farnoosh Torabi, editor-in-chief of CNET Money and a parent of two, says if you’ve got about six months of living expenses, you should be fine. “But if you’re still working in that direction, then set up an automatic transfer to savings every pay cycle or monthly,” she adds. “This way, you’re saving before you spend, and you can still buy random baby supplies at 4 a.m. without having to do it at the expense of your emergency fund.”
It’s also worth automating other things. As a firm believer in using technology to help me get out of my own way, I’ve set all of my bills to automatic payments so I don’t have to remember when they’re due (or at risk). chance of late payment when I definitely forget). Jamie Bosse, a financial planner, author of Money boss mother, and is a parent of four (!). She even set up a joint checking account with her husband to automatically pay for their childcare expenses. “We calculated the cost of childcare each month, rounded it up a bit, and made sure our paycheck goes directly into this account to cover those bills,” she said. speak. “Then we never have to think about them.”
I also use Digit, an app that takes a small amount of money from my checking account every day and puts it in savings without me realizing it’s gone. I treat it like a special reserve cash fund and pour it into it whenever my checking account gets stressed.
It may also be a good idea to sit down with a financial advisor. “For me, what you need most is the reassurance that you won’t overlook other big financial things like saving, investing, buying life insurance and saving for your child’s college education,” says Torabi. friend. “Working with a certified financial professional to organize and create systems for those goals can be a worthwhile investment.” Many certified financial planners are used to helping clients adjust to major life changes (marriage, having children, etc.) until you feel confident you’re on the right track. (For more on how to find a good one, read here.)
Finally, I think it’s a good idea to take a closer look at where your money is going. I’m not saying you should go through each Amazon order, but it can be helpful to take 15 minutes – set a timer if you want – to get a rough estimate of how much you’re spending on groceries, children’s clothing, and other significant expenses. (If your baby-related expenses seem overwhelming, this baby cost calculator from BabyCenter is a good tool for cross-checking what’s normal.)
I tried this for myself last night after my son went to bed, and while I dreaded adding up the bills from Whole Foods (my son eats an entire box of raspberries every day), it ended up being a real treat. comforting to see that I mostly just buy my stuff. important considerations – good food, books, plane tickets for the vacation (plus some good moisturizer and a haircut for me). Amid inflation and other weird price swings, I often feel as though my money is leaking out of my bank account, and a preliminary inventory has given me more control. Maybe someday I’ll have the energy to do more of it, but for now, that’s enough.
The Cut’s financial advisor Charlotte Cowles answers readers’ personal questions about personal finance. Email your money conundrums to firstname.lastname@example.org
https://www.thecut.com/article/new-parent-finances-mess.html ‘I’m a New Parent and Our Finances Are a Mess’