Holy Crap!, my wife is and life is about to change BIG TIME!

My head is spinning, primal hunter/gatherer instincts are setting in. Find food and water, secure shelter, wrestle beasts, protect the family!   Time to review our behavior and make some financial changes ASAP…

Immediate thoughts in my head:

  • Batten down the hatches
  • Hoist the main sail
  • Build cash reserves and liquidity
  • Cancel all excess spending
  • Kill cable TV and renegotiate cell phone contracts
  • Stop going out to eat 5 nights a week damn it!
  • Cancel gym membership to decrease costs but get yourself in fighting shape for Christ’s sake! Run in the cold and snow if necessary. You can’t carry a kid around if you have no endurance!

OK, let’s slow down and take inventory using a checklist:

Secure :
Job – check, job security – questionable at best;
Passive income from investing - good, security – medium
Side project income – blogs, advertising and other – low but growing slowly, security – at this point I am not even sure, I would estimate – low

Health insurance: check, decent coverage, but deductibles are a little high in my opinion

Flexible Spending Account: check, covers all deductibles and will reduce my taxable income

Life insurance: check, policies for both myself and wife

Disability: check, through my job

Long-term care: check, through my job, pays 60% of pay if something happens

Will & estate : no, need to work on this

: check, probably too big at this point, it’s over 12 months worth of .  

Review living situation:  in progress, we live in a 1-bedroom apartment, clearly that is not going to cut it anymore.

Establish 529 College savings plan:  no, need to do this.

Max-out 2011 retirement contributions: partially; my 401k is maxed-out, but the wife’s individual 401k contributions are in progress, we need to max-out here contributions and match.

Evaulate expenses: no, need to get on this focus and on our entertainment budget which seems to be our weakness

Increase savings rate: check, but I think we could probably increase savings by another 5% of after-tax income; will consider this one

I think is a pretty good list to get started, but I am sure I am missing something.  

What steps did you take when you learned that you were expecting your first child?  How did you go about re-prioritizing your expenses and spending to build up savings?   Did you end up relaxing your budget to purchase important items, insurance or financial contracts as part of your preparation?  Will I need a spreadsheet just to calculate the astronomical cost of diapers over time?

Would love to hear from my readers on this one…

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  23 Responses to “OMG, My Wife is Pregnant, Initiate Financial and Behavioral Overhaul”

  1. [...] to Neo at Net Worth Protect, his wife is pregnant!   His article gives an immediate checklist of his priorities going [...]

  2. Congrats! Hope you are now a proud father of a sweetest kid already. So I guess your stress are wipe out leaving lots of cheers only and you are taking care of both of them happily. Good wishes for the new born baby and the new mother (father, too ;) )!

  3. [...] I pray that my wife and I have a healthy new baby on or around April 10, 2012 and my goal is to be ready for the challenge of raising this new little [...]

  4. Congratulations!!! My kids are all adults, but I sure do enjoy the grandkids!!

  5. Congratulations! What a fabulous, exciting time in your life! We have four kids and the excitement was the same with each one. Most of the everyday financial stuff with happen naturally. For example, you won’t be going out to eat or going to the movies as much. You will be doing much more fun stuff at home! Just try to relax and enjoy the moments. The kids really do grow up fast!

    • WOW, You are a saint! How do you raise (and afford!) four kids??? Congrats to you!

      I think you are right that once the baby comes, he/she (we don’t which…) will act as a naturally governor on our ability to spend. My wife and I are not “stuff” people, we are not into buying items and owning things. Our love is experiences, we love to dine out and we love to travel and those are things that become hard to do right away with a new baby. So, I think we will automatically start saving money once the baby comes! Although, our housing budget may jump because we will need to upgrade pretty quickly.

      Anyway, thanks for the kind words!

  6. [...] NetWorth Protect is having a baby! Get ready to change a few habits. Check out OMG, My Wife is Pregnant! [...]

  7. Massive congratulations to you and your wife! That’s amazing news. You must be so pleased.

    With my finance hat on now (excuse this) but you and your wife should make sure you update your life insurance policies when your child is born. It’s super important to update your policy when your circumstances change.

    Now back to the celebrating! YAY for you both. I wish you the best of luck with the pregnancy.

    • Harri, thank you very much for the kind words! We just reviewed our insurance policies so I think we are good there. Was you point about the amount of insurance ($) or that we should make sure our beneficiaries are up-to-date?

  8. Congrats Neo! Sounds like you are off to a great start with planning.

    • @WOF, I think that we are too, however I would loved to get some advice from anyone out there who recently had their first child. Am I missing anything? Is there something I listed that I really am over-thinking?

  9. I think Congrats are in order! I am sure you will work everything out just fine.

  10. Congrats! We don’t have children, but from most of my friends’ experiences, it does seem expensive. I do think a financial overall is a very common reaction. It matters when someone else is depending on you making smart decisions.

    • @Roshawn – Yep, I think I have signed up for a couple of decades of serious expenses, but I will get used it and I am sure it will be well worth it. I am definitely thinking through my responsibilities and right now I am having an initial over-reaction, but I know me, I will settle in for the long haul. As long as I have a solid financial game plan and live within my means (and of course love, love, love my kid), things will work out just fine.

  11. Sounds like you are ahead of the curve. Speaking from recent experience, diapers and even food are not nearly as bad as people would lead you to believe. Adjustments in your eating out can more than make up for diapers, even in NYC. I recommend piling up cash for any unknowns until everyone is home safe, then back to normal plans. CASH will help you enjoy the roller coaster ride your on. Good Luck

    • @Chris R. , Right, eating out is my baby right now, but that is about to change. I think it will happen sorta naturally because taking a baby to a crowded restaurant or pub is not too fun anyway. So, call me Chef Neo from now on! And also chief butt wiper

  12. Congratulations. Well you have time to prepare and your life will never be the same. My children are adults and we have a super great relationship. They are both successful in their careers. The most important part of parenting is spending time with children and be a good role model.

    • @krantcents, thank you for the kind words! Spending time with my kids is a big focus! That is why I am a trying to be a little over-the-top with savings because I simply view money as a way to buy time… Passive income and net worth give you a lot of flexibility

  13. Where I live, daycare for an infant is equivalent to a mortage/rent payment. Think about preparing for a “double mortgage”. Diapers can be a drop in the bucket by comparison.

    • @Melanie, I hear you! I live in New York City and I can’t even imagine what day care must cost here. It’s probably $2,000 a kid per month, ouch! I think we will try and find a way around that one…

  14. CONGRATULATIONS! that is exciting news! although a bit scary as well with the finances. a friend of mine is having a kid and oh man, things are sooo expensive!

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