Having a baby in April 2020 - Whats your best financial advice for a new parent

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Financologist
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Re: Having a baby in April 2020 - Whats your best financial advice for a new parent

Post by Financologist » Wed Feb 12, 2020 11:44 pm

First and foremost.. this moment goes quickly. Do your best to embrace the "struggle."

Financial advice.. spend as much time with baby as you can. This will leave little time for shopping (hint: most baby stuff will become useless quickly and was worthless to begin with..) but dont quibble if your partner wants something for babe.. they'll be enough to quibble about along the way.

Have a blast!

daave
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Re: Having a baby in April 2020 - Whats your best financial advice for a new parent

Post by daave » Thu Feb 13, 2020 12:21 am

birnhamwood wrote:
Tue Feb 11, 2020 9:44 pm
I strongly agree with the 4 posters (so far) who recommend a 529 plan for college.
Surprised at how bullish everyone is on 529s in this thread, usually Bogleheads are more skeptical of them.

- Take care of your own retirement savings and household budget first. The kids can borrow for college but you can't borrow for retirement. Your financial stability and peace is a greater gift to your kids than a free ride through school.
- The kids might not use the 529 funds.
- Depening on income level, state tax benefits and other factors, you might be better off just paying off your mortgage before the kids reach college age, and cash-flow tuition if you decide to help kids pay for college
- Even if you do decide to start a 529, there's no urgency. The tax benefit compared to just putting the funds in a taxable brokerage account in a low cost and low turnover index fund aren't drastic, especially over a short period of time, you can choose to fund a 529 when they're 5 or 10 if it seems worthwhile

sawhorse
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Re: Having a baby in April 2020 - Whats your best financial advice for a new parent

Post by sawhorse » Thu Feb 13, 2020 4:26 am

My sister in law, who has a small child, said that she wishes she had never bought any toys because people gifted them so many, and a lot of them were played with for a day and never again. Now they have so many large toy sets just taking up space. Same with books. Use the library.
willthrill81 wrote:
Tue Feb 11, 2020 2:44 pm
:sharebeer

I also highly recommend that you ensure that you have adequate disability insurance apart from a job.

And I echo the above comments to update your wills and other 'end-of-life-related' documents and to not buy a bigger house right off the bat. Many parents have very contentedly raised large families in homes under 2k sq. ft.
Yes, many have raised multiple children in apartments less than 800 square feet. There's a family of 5 on my floor in one such apartment (kids ages 8-15), a family of 4 in a 500 sq ft unit, and a family of 3 in a 350 sq ft unit. When I was growing up, a house across the street looked to be about the same size as my family's - roughly 1200 sq ft - and
had 1.5 baths. There were only two kids in my family, and I think we probably could have handled 4-5 kids in the space at a stretch based on how it felt when relatives moved in for long periods of time. Any more than that, and there would have been fist fights over the shower.

The house across the street had 8 kids plus 2 parents all living there at the same time :shock:

I totally agree about disability insurance.

def6732
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Re: Having a baby in April 2020 - Whats your best financial advice for a new parent

Post by def6732 » Thu Feb 13, 2020 6:38 am

Post partum recovery is important and in my opinion overlooked in the US. Mother’s body needs months to recover after birth. Be gentle and kind to yourselves.

FI4LIFE
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Re: Having a baby in April 2020 - Whats your best financial advice for a new parent

Post by FI4LIFE » Thu Feb 13, 2020 7:17 am

Babies can survive on love, mommy's milk, some cloth diapers, a box to sleep in, and a blanket. Whatever you choose to purchase beyond that is not a necessity. Consumer culture pressures new parents into purchasing a lot of crap that will just be in a landfill in a couple years.

I second the term life insurance and disability insurance. You may want to wait until after the pregnancy to purchase your insurance. My wife's weight and high blood pressure during pregnancy caused us to pay higher premiums for her.

Foredeck
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Re: Having a baby in April 2020 - Whats your best financial advice for a new parent

Post by Foredeck » Thu Feb 13, 2020 7:28 am

Hi, Congratulations.

This is an important moment in your life.

For me having a family was the kick in the pants I needed to get serious about financial planning. It's around this time I discovered the Boglehead community.

I wish we would have done the basics before the baby arrived.

1.) Created a household budget.

2.) Have an emergency fund. Our delivery had some complications and the hospital bill was a lot of money.

3.) Buy life insurance.

4.) Make sure the household is contributing 15% to retirement plan(s). I think because we didn't do a budget or have emergency funds we had to reduce our contribution.
Also We were contributing, but not as much as we could have. Missed opportunity. Our goal is to keep contributing at minimum 15% in order to reach our retirement goal.

5.) Payoff an pre-existing credit card debt.

Things we did do before the baby

1.) Did our estate planning. Setup Trusts and worked out who will get our baby in the event my wife and I should die. Laid out in the details in the Trust how the funds are to be allocated for our child.

2.) Updated health insurance info.

3.) Opened a 529. This can be done after the baby is born.

Best of luck. It's an exciting time for you. I hope this is helpful.

Foredeck
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Re: Having a baby in April 2020 - Whats your best financial advice for a new parent

Post by Foredeck » Thu Feb 13, 2020 7:37 am

Financologist wrote:
Wed Feb 12, 2020 11:44 pm
First and foremost.. this moment goes quickly. Do your best to embrace the "struggle."

Financial advice.. spend as much time with baby as you can. This will leave little time for shopping (hint: most baby stuff will become useless quickly and was worthless to begin with..) but dont quibble if your partner wants something for babe.. they'll be enough to quibble about along the way.

Have a blast!
This is so true. Great advice.

Despite being sleep deprived and just generally exhausted, you will soon recognize that you need to be present, NOW. The baby phase goes so fast, and *poof* it's over.

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willthrill81
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Re: Having a baby in April 2020 - Whats your best financial advice for a new parent

Post by willthrill81 » Thu Feb 13, 2020 10:20 am

Foredeck wrote:
Thu Feb 13, 2020 7:37 am
Financologist wrote:
Wed Feb 12, 2020 11:44 pm
First and foremost.. this moment goes quickly. Do your best to embrace the "struggle."

Financial advice.. spend as much time with baby as you can. This will leave little time for shopping (hint: most baby stuff will become useless quickly and was worthless to begin with..) but dont quibble if your partner wants something for babe.. they'll be enough to quibble about along the way.

Have a blast!
This is so true. Great advice.

Despite being sleep deprived and just generally exhausted, you will soon recognize that you need to be present, NOW. The baby phase goes so fast, and *poof* it's over.
:thumbsup

And take tons of photos and videos, often making backups. You will absolutely treasure them.
sawhorse wrote:
Thu Feb 13, 2020 4:26 am
My sister in law, who has a small child, said that she wishes she had never bought any toys because people gifted them so many, and a lot of them were played with for a day and never again. Now they have so many large toy sets just taking up space. Same with books. Use the library.
Agreed entirely on both counts. We visit our local library for a fresh stash of a dozen or so books for our daughter almost every week. She can't read quite yet, but research and our own experiences indicate that reading to your kids multiple times daily is one of the best things you can do for them.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Stinky
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Re: Having a baby in April 2020 - Whats your best financial advice for a new parent

Post by Stinky » Thu Feb 13, 2020 10:57 am

lessismore22 wrote:
Wed Feb 12, 2020 10:21 am
Won't need it for a while, but when you start potty training I highly recommend a book called Oh Crap!. My wife used it and we had fully trained kids at 22 months and 19 months old.
Thanks so much for the tip! I’ve ordered a copy for my daughter, who is struggling to train my 39 month old grandson.

I just love coming to this Forum daily. It’s amazing what tidbits of information you can pick up here.
It's a GREAT day to be alive - Travis Tritt

bo105954027
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Re: Having a baby in April 2020 - Whats your best financial advice for a new parent

Post by bo105954027 » Thu Feb 13, 2020 11:50 am

Darth Xanadu wrote:
Tue Feb 11, 2020 2:21 pm
Arabesque wrote:
Tue Feb 11, 2020 2:15 pm
Kids grow fast, and they change like lightening. Borrow or buy second hand as much as possible.
+1

Plenty of good, usable merchandise to be had at a fraction of the retail price.
For example?
Time in market beats timing the market.

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Darth Xanadu
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Re: Having a baby in April 2020 - Whats your best financial advice for a new parent

Post by Darth Xanadu » Thu Feb 13, 2020 11:59 am

bo105954027 wrote:
Thu Feb 13, 2020 11:50 am
Darth Xanadu wrote:
Tue Feb 11, 2020 2:21 pm
Arabesque wrote:
Tue Feb 11, 2020 2:15 pm
Kids grow fast, and they change like lightening. Borrow or buy second hand as much as possible.
+1

Plenty of good, usable merchandise to be had at a fraction of the retail price.
For example?
My mother-in-law recently purchased a used kitchen play set, with accessories, for my 2 year old from a resale shop for $8. It retails for $90. My partner recently sold a used "infant chair" thing for $8 that retails for $40. So, the deals are out there.

Some things you would only purchase brand new, like a car seat, but for me that's been one of the few exceptions.
"A courageous teacher, failure is."

GAAP
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Re: Having a baby in April 2020 - Whats your best financial advice for a new parent

Post by GAAP » Thu Feb 13, 2020 12:07 pm

Decide now if you will want to fund some or all of future college expenses. The sooner you start, the less it will impact your budget. My personal choice would be I-bonds for the flexibility in the future.
“Adapt what is useful, reject what is useless, and add what is specifically your own.” ― Bruce Lee

runner540
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Re: Having a baby in April 2020 - Whats your best financial advice for a new parent

Post by runner540 » Thu Feb 13, 2020 3:56 pm

def6732 wrote:
Thu Feb 13, 2020 6:38 am
Post partum recovery is important and in my opinion overlooked in the US. Mother’s body needs months to recover after birth. Be gentle and kind to yourselves.
+1000
Congrats!
Also put some money in your budget now for pregnancy and after for postpartum for things that insurance doesn't cover but will make a huge difference to your wife and baby:
-Baby stuff that you didn't know you needed/forgot to register for
-prenatal massages, body pillow, workouts/yoga, massages, lactation help, physical therapy after birth, etc.
-Good registry advice here: viewtopic.php?f=11&t=301578&p=4973699#p4973699

Non financial:
-line up in-home help for the first few weeks: your parents, siblings, good friends who have had babies, etc. who can help keep your heads above water.
-read up on baby care, sleep training and parenting - much easier to do before you are recovering from birth, up all night, etc. There are lots of resources out there, ask around to your friends who are handling parenthood well.

Sic Vis Pacem
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Re: Having a baby in April 2020 - Whats your best financial advice for a new parent

Post by Sic Vis Pacem » Thu Feb 13, 2020 5:25 pm

As a dad of an almost 15th month old, I agree with the vast majority of the above. I'll offer one comment, in the hopes it might help.

Amazon Prime can be a fickle mistress for a new parent. It can be a real life saver when you do not have time to run out and get supplies needed for baby. However, sleep deprivation, major shifts in your schedules, and stress can lead to impulsive purchases, and 1-click can really exacerbate that issue. Buying the new sleepsack in the hopes it helps baby sleep, or a new kind of bottle if feeding is going difficult, can seem like a really good idea. Any why not get those new shoes while you're at it, you deserve it, it's been a rough week. Especially if money is not particularly tight, the $40 here and $50 there is easy to justify...until there are a whole lot of them showing up on your account. I know our normally disciplined spending took a real hit during this period and, looking back, the vast majority of it was probably unnecessary. Now, maybe this isn't your vice, but it wasn't ours either. Until it was.

My $.02.

bad1bill
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Re: Having a baby in April 2020 - Whats your best financial advice for a new parent

Post by bad1bill » Thu Feb 13, 2020 5:47 pm

Agree with all the pointers including adequate insurance.

One caveat: research and buy a NEW highly-rated car seat ; get training on its installation. Many recalls and/or abuse have happened to used ones . Use it religiously. Upgrade to a booster seat WHEN APPROPRIATE.

Be there for each other so no one feels overburdened by parenting. Understand the wife is stressed the most in the early stages and compensate accordingly.

Eating out with the first newborn was (for us) really easy as the son slept most of the time or cooed and looked cute. After they start crawling, look out!

Get a (used) baby jogger or backpack/frontpack so you can get outdoors and stay active.

bo105954027
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Re: Having a baby in April 2020 - Whats your best financial advice for a new parent

Post by bo105954027 » Fri Feb 14, 2020 10:10 am

Darth Xanadu wrote:
Thu Feb 13, 2020 11:59 am
bo105954027 wrote:
Thu Feb 13, 2020 11:50 am
Darth Xanadu wrote:
Tue Feb 11, 2020 2:21 pm
Arabesque wrote:
Tue Feb 11, 2020 2:15 pm
Kids grow fast, and they change like lightening. Borrow or buy second hand as much as possible.
+1

Plenty of good, usable merchandise to be had at a fraction of the retail price.
For example?
My mother-in-law recently purchased a used kitchen play set, with accessories, for my 2 year old from a resale shop for $8. It retails for $90. My partner recently sold a used "infant chair" thing for $8 that retails for $40. So, the deals are out there.

Some things you would only purchase brand new, like a car seat, but for me that's been one of the few exceptions.
Hum.. interesting. Where can we find such used thingies for kids? Is there any dedicated store or website?
Time in market beats timing the market.

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Stinky
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Re: Having a baby in April 2020 - Whats your best financial advice for a new parent

Post by Stinky » Fri Feb 14, 2020 10:17 am

bo105954027 wrote:
Fri Feb 14, 2020 10:10 am

Hum.. interesting. Where can we find such used thingies for kids? Is there any dedicated store or website?
Thrift stores.

Consignment stores.

Garage sales, especially in the “better” parts of town.
It's a GREAT day to be alive - Travis Tritt

momof3
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Re: Having a baby in April 2020 - Whats your best financial advice for a new parent

Post by momof3 » Sat Feb 15, 2020 9:33 pm

Congrats!! Like most everyone else already said, buy second hand whenever possible. Nearly all my kids' clothes, books and toys were either given to us or bought at thrift stores/yard sales. Kids grow out of clothes so quickly, especially during the first year, that it's not necessary to stock up on a ton of them. We are particularly fond of the footie pajamas that ZIP up. If it has more than 3 snaps, don't buy it. You'll be cursing yourself during that middle of the night diaper change.
Kids really don't need much in the way of toys, either. Keep it simple with some board books, a few balls and dolls/little people. We also keep the battery operated toys to a minimum. Try to ignore all the labels that say those toys that make 50 different noises will help your little one learn. What I've found is it gives them a shorter attention span and you a headache. At least if you do buy a noisy toy, make sure you can turn the volume down.
For diapers, we use Amazon Subscribe and Save and save nearly $10 per box of diapers we buy. Plus, they come right to your door. Done.
As for the popular items you can find in any baby store, the ones we've used repeatedly are:
1. Nosefrida (yes, the snot sucker. So gross until you see how well it works).
2. Wubbanub (or similar type of paci with an animal attached). It doesn't get lost as easily in the crib and baby quickly learns how to put in in her mouth by herself, which is priceless.
3. An absorbent set of bibs for the first few months (like green sprouts organic cotton muslin). Some of the cute terry bibs just let liquid roll off them. When baby begins solids, a silicone bib with a pocket at the bottom to catch the food is invaluable. We have used the same ones for over 5 years with 3 kids. They say you can machine wash but that will eventually cause them to tear. I just rinse with water unless it's a really sticky mess.
4. A convertible car seat, like Graco 4Ever 4-in-1 carseat. It's the only one you'll have to buy from infancy until your child is in a booster. Overall you save on money and space since you don't have to store an extra infant seat after baby outgrows it.
Items we have bought and found were a waste of money are:
1. A diaper pail. They STINK. We've found a small wastebasket with a plastic bag to be much more effective. Change it as needed (or immediately if it's a poopy diaper). Speaking of poop, once your baby transitions to solid instead of liquid (sorry, gross, but you're about to be an expert in bodily excretions) we just dump it in the toilet so we don't have to take the trash out as often.
2. Baby food. Baby can eat whatever you do. With a first baby I thought I didn't have the time to make baby food but with the 2nd and 3rd realized it's not even that hard. Just take your leftovers and steam/mash/puree. Also, avoid the trap of buying pouches (basically food that is an applesauce consistency in a pouch the kid can suck on) and puffs. They are both incredibly addictive and the cost adds up over time.
3. Fancy butt cream. 100% petroleum jelly works just as well at a fraction of the cost.
A few more tips...if anyone ever offers to help, say yes! Sleep when baby sleeps. Some babies cry more than others. If you need to step away for a few minutes to keep your sanity, do it. The first month you're in "survival mode"; don't discount small accomplishments, like, taking a shower or getting baby out for a short stroll. Enjoy-it just gets better and better.

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