Financial Goal?

Kirstie155

Hi everyone-I just used mint.com to create a financial goal for when we plan to have baby. I want to have a separate account just for our "baby fund" because this helps me the most as far as working towards a goal and seeing how close we are getting.

Has anyone else done this?
I have 27 pounds to lose, and I'd like to save up quite a bit of cash before we have baby, so since we are TTC in October, that gives us about 18 months to save. We live in the US, so healthcare is not great and we will be paying for quite a bit out of pocket-not to mention fun things like baby gear that we will need to buy!

MrsR130

We use mint.com as well! It's a great tool to help you see what is coming and going and see progress to your goals. It's nice being able to see every account all at once.

We have two additional savings accounts: a baby fund one that we just started a few months back (furniture, baby & maternity clothes, gadgets, nursery decor, medical expenses, lost wages due to time off, etc.) and one to work on rounding out our emergency fund to get up to 8 months of expenses saved up.

It's hard, but worth it!

VeryKatie

Yup we also use Mint! Unfortunately our budgeting is all over the place this year (ugh, I just typed "year").

Kirstie155

My hubby doesn't like to have categories for our money, he likes to just have a lump sum in savings and use it as needed but for me, seeing a dedicated baby fund will really help keep things in perspective as far as really "getting there" because I have been ready to TTC for years now (a decade, really!) and October still seems so far away.

We have discussed taking a "Conception Moon" and going on a vacation in October when we pull the goalie...Something else to have a mint category for!

I have chosen an arbitrary budget amount, but haven't really done research on what we would need yet. His mom has all of his furniture from when he was a kid that we will use in the baby room, so a twin bed (for down the road), matching dresser and bookshelf, and a wooden rocking chair. I don't know if she has his crib or bassinet though-and a lot of times those old ones are unsafe now! So as far as furniture, we are going to get off pretty easily I think.
We would need a stroller and car seat, pack and play type thing, clothes for me and baby...

What do you think?

This is so fun to talk to you ladies about!

NatashaLP2014

I'm going to have to look into this mint thing! (is it free?) My husband has always been big on saving and I've gladly over the years converted to his ways. We also have money coming in that technically isn't ours, it's specifically money to pay for respite care for my daughter with CP. The ability to see everything laid out in one place would be a lifesaver.

As for baby stuff, some of our bigger up front expenses were buying cloth diapers+accessories. (No regrets, we used those for 3 years and they are tucked away for future #2.) And a breast pump (duel electric, about $500) which you may need to consider depending on if/when you're headed back to work and if you plan to breastfeed. If not, bottles and formula add up pretty quickly as well.

I'm lucky enough to live in Canada so a lot of our medical expenses are taken care of, (Specialized medical equipment is hit and miss, unfortunately.) but I would hate to have to take money into consideration if I was concerned about something and wanted to take my daughter to the doctor. So make sure you have enough to go whenever you feel the need!

puffbrat

My husband and I just use a Google docs Excel spreadsheet with several columns. We generally budget by quarter and have quite a few bank accounts to help us reserve money for certain uses.

• 2 checking accts - 1 that pays the mortgage, the other pays everything else
• savings accts - emergency fund (finally at goal), house fund (originally for purchase but now for upkeep), and vacation fund. We also had a separate account for the wedding. I expect we will add a new account for baby later this year.

We both find it really helpful to have separate bank accounts for large uses. The house fund is a permanent column in our budget that we track to as we spend. The others get added to the budget during the quarter they are spent against (like when we purchase plane tickets for a vacation, and when we actually go).

I would be interested to hear what you ladies think is a reasonable savings for pregnancy and baby, as I have no idea and few people in my life to ask or get hand-me-downs from (I live in the US).

VeryKatie

@NatashaLP2014 Yes, Mint is free. It isn't perfect but it does the job. American Mint.com is better than Canadian Mint.com.

You know what is crazy... that I'm such a planner but until now I didn't think of saving up for a baby fund! Yikes! We do general savings, have lots leftover from when we were planning for our house... but nothing dedicated to baby... Which we should since I'm having totally mixed feelings about work after baby. On one hand I like money. On another hand I want to raise my baby and I don't exactly love my job (if I'm going to be away from baby then it darn well better be for something important and something I enjoy...). Chances are I'll go back after this baby and reassess after potential baby #2... or #3... assuming it all lol!

Maybe I'll talk to my husband about that. He strongly dislikes the idea of having a bunch of different chequings accounts. But we're doing alright at mutual funds and he wants to try his hand at ETFs and stocks... But those are longer term than we might need for baby stuffs.

Maybe I'll make a baby goal in Mint and see if he notices LOL

puffbrat

I totally understand what you mean Katie about working after baby. I actually don't think I would do well as a full-time stay at home mom, but I don't love my new job like my last one and am not feeling the motivation to work. I think working part-time (20-30 hours per week) might be a good compromise. So far my husband is on board with that idea and actually keeps talking about how nice that would be for me since he finally accepted that I don't like this job very much (he strongly encouraged me to apply for it and accept the offer, and I think he feels guilty), but he still keeps delaying on creating a baby fund. Maybe that mindset will change when we actually start TTC.

You should definitely sneak that goal into your budget and see if your husband notices

Kirstie155

I had this super long and thought out post that I published yesterday right as I shut down my computer-and it didn't post. This was after I had another reply earlier in the day but hastily closed my browser at work (you know how gossip can be at work! Pregnancy thread, oh no!) Maybe I should work at work :P

Will try and get my thoughts back together and repost. I was really looking forward to hearing everyone's responses to what I said too In my post, I mentioned that I am planning on staying home after baby, and the issues I have run into with healthcare and maternity leave in the USA. I was hoping to have a thought provoking discussion about different options, and see what everyone says about the choices they would like to make.

@puffbrat I set my mint goal for $4,000 for baby fund, but I really just chose that number at random, ha! What does everyone else think? X months of salary? X months of expenses?

puffbrat

Thanks for the feedback @Kirstie155. Even though you chose the number at random, it is helpful for to hear what other people are considering since I am completely clueless.

I have had issues on this site a few times in which a (usually long and well-thought out) post doesn't publish for some reason. I look forward to the discussion when you are able to re-post.

One of my biggest financial concerns regarding savings and working versus staying at home is the cost of child care. I live in a very inexpensive part of the US and consistently everyone I have talked to said that childcare costs $800 per month per child. That is what we were paying for rent for our two-bedroom apartment! How do people afford that?? My husband and I are doing very well for our age and area, and that would still be a very significant expense for us. I have been told that our employer (husband and I work for the same large corporation) has less expensive child care but no one will tell me the cost.

VeryKatie

Kirstie155 wrote: »

I had this super long and thought out post that I published yesterday right as I shut down my computer-and it didn't post. This was after I had another reply earlier in the day but hastily closed my browser at work (you know how gossip can be at work! Pregnancy thread, oh no!) Maybe I should work at work :P

Will try and get my thoughts back together and repost. I was really looking forward to hearing everyone's responses to what I said too In my post, I mentioned that I am planning on staying home after baby, and the issues I have run into with healthcare and maternity leave in the USA. I was hoping to have a thought provoking discussion about different options, and see what everyone says about the choices they would like to make.

@puffbrat I set my mint goal for $4,000 for baby fund, but I really just chose that number at random, ha! What does everyone else think? X months of salary? X months of expenses?

Something I just read says is costs about $1000 monthly on average to raise a child from infant to 18. But the article I read was not clear if that "cost" included income reduction nor when the costs peak (it seems unlikely that it would be even through out life).

puffbrat

Interesting. That sounds like it could be a good guideline to start planning with at least. Like you, I imagine that "cost" varies depending on age and time of year (buying school supplies) but at least it is a starting point.

WifiresGettingFit

This had me curious so I just did a search on google and got this:

"According to a 2010 USDA report, the average middle-income family will spend roughly $12,000 on child-related expenses in their baby's first year of life. By age two, parents are up to more than $12,500 per year."

This is the article: http://www.parenting.com/article/the-cost-of-raising-a-baby

I also came upon a Cost of Raising a Child calculator (not sure how accurate it is though) but thought it might be fun to play with and interesting to see the results.

http://www.babycenter.com/cost-of-raising-child-calculator

MrsR130

We live in MA - the highest cost for infant care in the US at $16,459/year on average ($1400 a month - friends pay upwards of $2000 a month for certain care centers and forget about a nanny...). Our baby fund and emergency fund goals are MASSIVE.

MrsR130

Oh! And I love this calculator - it helps seeing all of the different potential costs (one time, childcare, re-occuring, long term, etc.)

It should help anyone that wants a realistic place to start to plan at least the costs of all of the first year gear.

http://www.babycenter.com/baby-cost-calculator

Kirstie155

Dannnnnng, @mrsr130! I live in northern Virginia, where I commute 50 miles round trip for my job and my husband commutes 70-and that is because of house values/salaries for the area. House values are super high here (its a "bubble" in NoVa!) Everything is expensive here, home values range wildly depending on which direction you drive-and the houses are pretty comparable, its mind blowing. We chose to commute because we live in the same town as both of our parents, and we both make good money-but not enough to spend an extra 200k on our house!

That being said, I figured child care would be outrageous here as well, though I only have one friend with a baby. Im sure that like house values in the area, child care will range depending on where you look-at work or at home.

@puffbrat Where we live you cant get a one bedroom for $800 (usually about 1k+), and 2 bedroom apartments usually start at around $1,600 and can quickly get over 2k depending on amenities and the area. Thats why we bought a house-its cheaper!

puffbrat

That's crazy! We are really lucky to live in such an inexpensive area (NM). Our mortgage without property taxes is cheaper than our apartment was, but a little more with property taxes.

I think it is pretty clear that planning how much we intend to work after having a baby and how that will affect income vs cost of child care is important factor in the financial planning process. I can't even imagine $1400/month.

VeryKatie

Ugh MINT. They have the worst customer service.

NatashaLP2014

Does anyone plan on setting up savings for your children's education or even retirement?

When my daughter was born (before we realized she had CP) my Dad talked to my husband and I a lot about savings and what we could do. For example if you put away a dollar a day from when they are born to when they are 18 then leave the money alone by the time they are 65 they will have over a million dollars for retirement just from that!

We opened an RESP (registered education savings plan) as well, though mostly to get the government grants and because it isn't necessarily linked to one person, it can be shared with any of our children. This is in Canada of course, not sure if the States has anything similar.

Planning for everything sometimes gets overwhelming, especially when it comes to that always limited resource of money!

puffbrat

We haven't talked about it much, but my husband and I would most likely save up for their education. We live in an area that is known for having poor education although there are decent public schools in our district. However, the best school in the city (state?) is a private middle/high school that is really expensive. I have no idea if we would go that route, but it would be nice to have the option and with careful planning we could afford it, especially for the high school portion.

Also, my husband's immediate family pays for college for all of the kids out of pocket. His parents paid the first 3 years of tuition for all three kids to some fairly expensive schools and the grandparents pay for the last year of college for all of their grandchildren. So it would be nice to be able to do the same for our children should they go to college.

Kirstie155

We are not saving for kids education right now. I just posted on the BABIES thread earlier today that I paid off my car yesterday, and we follow Dave Ramsey s methods. He basically says to save a little for emergencies, pay off credit and auto debts, everything but the mortgage. After that he says save for YOUR future, ie retirement and have savings before you worry about the kiddos education (but save for them after) His theory is that the kids can wait, and even help with their own education payments (part time job, scholarship, ect), but no one will put money towards retirement for you! @NatashaLP2014 we are both investing in our retirement funds and hubby might be making bigger contributions since the car loan is paid now. It's tempting to put it somewhere else (mortgage, baby fund, new shoes, lol) but honestly retirement is one of the best investments in your future that I think you can make.

Hubby and I both feel that our kids should not be burdened with education debt, so do plan to save for that later so that we can pay for it (but have them help where they can-see above!) I had student loan debt and it was awful. I only had about 12k in debt and it took me 8 years to pay it off!! I paid the minimum because it was all I could afford and i had several other debts as well... I hope to keep my kids from the same burden.

@puffbrat That's awesome they pay for college, what an amazing gift!

The higher education system in the US is highway robbery! I wish it wasn't so expensive

Great discussion Natasha!

NatashaLP2014

It certainly is super expensive even up here in Canada. My husband and I are much more a fan of trade collages but we obviously would not stand in the way of whatever our children decided they wanted. My Dad paid for university for me but my husband was paying off student loans for years after we got together, I would love for my kids to avoid that. Hopefully by the time our kids hit that age the bubble will have popped and it will be more reasonable!

We are saving for our own retirement and have been for several years, Canada has a great tax free savings account program which we can each put 5500 in per year. (The name is a bit of a misnomer since it is actually best as an investment account with all the money made on the investment as tax free.) We are not using the max room yet but hopefully in the next few years we will be able to. Plus his company does RRSP matching which comes off his paycheck automatically. Nothing makes me feel like more of an adult than looking at how much we have set away for retirement!

I worry more about my daughter Becca being taken care of and having the money she needs once my husband and I have passed away or otherwise cannot take care of her any longer. Thus the preoccupation with my children's retirement.

Kirstie155

@NatashaLP2014 Of course any medical or special needs for a child I would invest in to make sure that they are taken care of- my nephew is autistic and my sister has a trust set up for him. I didn't mean any disrespect, and hope it didn't come off that way! Like you said, there is only so many dollars in each paycheck. Our dollars are saving for retirement and padding our savings at the moment. You are right- I feel so grown up talking about retirement!!

puffbrat

@Kirstie155 it is an amazing gift that his family pay for college and wonderful that they are in a financial position to be able to do so!

Since late last year, my husband and I are extremely fortunate to be in well paying jobs that afford us a lot of financial flexibility. We are fully invested in our retirement and won't touch that contribution unless absolutely required. However, we still have extra money each month going into emergency savings, house fund, and vacation fund. At some point we will have to readjust those allocations to save first for pregnancy/baby and then a fund for the child/ren to be used for education or as otherwise needed.

VeryKatie

My husband and I are definitely going to do RESP for our kids. We haven't decided about what else we will do yet. Our families did different things for us so we're both leaning in the direction of what was done for us. I'm hoping to find some middle ground. It shouldn't be too big a problem.... honestly it's going to be a lot based on what other savings we are doing (RRSPs, ETFs, etc), expenses, etc. and what we can do on reduced income during parental leave. Plans may change as we age (promotions, more kids, job changes, etc).

12Sarah2015

Our first baby we spent hardly anything till he needed size zero clothes. Found everything second hand (except the high hair, I wanted new $30 ikea). Don't need half the contraptions they sell. Cook mostly everything at home. Most expensive thing is the food, once baby is walking, they eat a lot!

VeryKatie

@12Sarah2015 It's really nice to hear that it can be done cheaply! I will hopefully have the benefit of some used clothes as well since I'll be the third of my siblings to reproduce (lol). But my sister's babies were all pretty chubby so I don't think she has much newborn stuff. Mine might end up the same, who knows, or maybe they'll be skinny minis.

12Sarah2015

My baby was tiny 00000s. We didn't have this size so we just wrapped him in a blanket and he wore bigger clothes-no one knew and we had lots of visitors

Kirstie155

So I think I'm going to be denied again for short term disability insurance, so Ive decided to do something about it! I have started a "short term disability insurance replacement fund."
The insurance would have cost me ~$900 to date for the insurance if I had gotten it when I first started.
Instead of paying insurance premiums Ill never get back...I'm putting that money (and then some) in a savings account each paycheck. I wont be able to save enough to replace my missing paycheck for the full 12 weeks that I will be out, but it's certainly better than the no insurance, no maternity leave I have in place right now!

puffbrat

@Kirstie155 That really sucks you were denied again! That's a great idea to put that money into a savings account instead. Any amount you put in there will help.

VeryKatie

weee my raise is approved! Not sure exactly when it will be processed but still - all is well. Which means it doesn't matter if people at work find out about my situation now lol.