5 Tips to Becoming $$ Stable for the First Year with a Baby

This has to be the universal blanket for newborns in the US

There are lots of things I did wrong in my 20s financially. I wasn’t having a baby so I went nuts. Spent money on stupid disposable things instead of experiences. Racked up unnecessary debts. Then I turned 30 and life had to get serious. We finally got married, bought a car, bought a house, and realized we were in a world of hurt if we wanted to have a baby before we were 40. Here’s some of the thing we did in a hurry to get more financially stable. We’re not perfectly stable but we are getting there.

At 30 I was finally finished with my education, we were finally getting married, bought a house, bought a new vehicle, started to pay off student debt. All of that adds up incredibly fast. We knew we needed to get financially stable before even thinking about kids. While we were living off a single income while I was in school things were super tight and we had to make a few purchases on credit cards. Whatever you do, do not do payday loans. Even a credit card is set at 29.99% APR at the highest. Payday loans aren’t set and can go over 400%+ APR + there are additional fees of $15 or so. We got a line of credit when we needed new tires. We needed 2 months and we paid it off. Had we got a payday loan, it would’ve cost so much more and could’ve ruined us financially. I’ve seen so many people think they’re making a smart choice going that routine stretching between paychecks. Don’t do it. Even a $500 credit card will do more good in the long run and will cost you less when used responsibly.

Here’s what we did both knowing or unknowingly helping us get set up financially during the first year with Evie.

We opened an Acorns account

This was by far the smartest thing I did. I started mine in graduate school. You bind the Acorns account to your bank account. For each transaction, Acorns will round up to the next dollar and invest the change into a Vanguard fund or bonds. Right now bonds are smarter but as the markets change back you can shift your portfolio to fit what’s best suited for the market. The fees are minimal and free to students. After a few years that left over change (roundup) can become thousands.

Have an emergency and see cash? I have those and those acorns become cash and are deposited directly to your bank in 2-3 business days at the push of a button. No calling a broker. Everything done through phone app or website. It’s super handy to know I have an emergency backup but I also leave it.

Acorns is best for the long-term investment. Accounts like college, retirement, savings for a once in a lifetime trip. Instead of having a normal savings account where your money just sits there. You worked hard to make that money, why not start an Acorns account and make that money work for you.

You can get additional money invested shopping through some of their partners. We shop a lot from Old Navy right now because toddler clothes and get an additional 2% of the purchase. A little bit adds up quickly. Need a new iPhone or Macbook? 1.5% reinvested through Apple. Grubhub also has a lot of options. Want to try HelloFresh? $40 invested into your Acorns account. Travel a lot and use Orbitz, Travelocity, etc.? You can get 2-3% invested into your account. Look them up and use them. It’s free money that’s working for you.

$50 a month + the additional investments = Thousands after a few years.

You will buy a lot for baby (think cribs, bassinet, furniture, diapers, wipes, toys, clothes, etc.) might as well get additional money for that invested.

HSA NOT an FSA also look at Childcare Dependence Credit

Still in the hospital and absolutely nothing fits. Even the knitted caps that are donated to the hospital by a local knitting group were too big.

In the United States, having a child is crazy stupid expensive. My hospital bill before insurance was $26,000. After insurance it was closer to $4,000. Still not something that’s cheap even with a pretty good insurance program. What I did was an FSA and boy oh boy was that a massive mistake. If you don’t use it, you lose it with an FSA. We ended up losing $700 from my FSA because we had a miscarriage. The way that money was added every month, those monies we planned on adding in October, November, and December we struggled to buy things we just didn’t need. I bought 5 years worth of tampons.

An HSA you can build over time and it moves with you. Start a new job? It will travel with you. We have dental appointments, ER visits happen, glasses, etc. You still add to it monthly like an FSA, but those payments at the end of the year you don’t fear losing because it’s your money, nobody should get it because you didn’t have a medical emergency. If you can’t tell I hate FSAs. They’re designed to help you lose your money.

The best part is that it’s pre-taxed dollars. But there are a lot of limitations. You have to have a specific health insurance plan (most insurances now qualify), can’t have an FSA, can’t be a dependent, can’t have medicare or tricare. There are $ limits per year. But it is a bit of a tax shelter. You can also use these funds as an investment tool and then those medical payments are made tax-free. Curious what kind of stuff you can buy, look at the HSAstore.com for a look.

I should’ve done an HSA awhile ago. I wish I had.

Worked our Tails off paying off Credit Cards

We had 3 cards with lots of cash on it and several with smaller dollar amounts. Start with the smallest, pay it off. Next smallest, pay that off. Yes the biggest just sits there gaining interest but that method works. I felt so much success paying off 1 then another. Those minimum payments rolled to paying off the next card. It was rough when we had 9 minimum payments to make. We’re down to 3. My credit score has also shot up making me eligible for those ultra low interest rates on new vehicle purchases.

The dirty secret of the credit score. You need to be paying off credit in order to maintain it. Always be using 10% or less. The max amount is 30% before it starts lowering your credit score. If you don’t know your credit score, look it up. It may seem scary but seriously look it up. Best part is that it’s free.

Also call your credit card company to see if you can have your APR dropped. It won’t save you a ton every month but getting it dropped down is going to help a little. Even an additional $5 every month going to debt instead of interest payments is an additional $60 every year to work paying down that debt.

If you have Health Insurance…

Thanks to a friend (thank you Becca), we finally have a premie outfit that fits!!! kind of. She wore that outfit almost everyday for another 2 weeks before she outgrew it.

Ask your OBGYN what all you can get a script for. Call HR/insurance company to get the run down of what you can and cannot get paid for while you’re pregnant. If you need to up to a higher tier plant for that year, it’ll save tons in the long run. You will absolutely hit your deductible regardless if you’re at a high deductible versus low deductible plan. I got my breastpump, parts, a few belly bands, compression socks, recovery garments paid for by insurance. All of these things saved us thousands instead of paying out of pocket for everything. Your health insurance is expensive, use it. Having the proper, high quality equipment makes that recovery process a lot easier.

I used Aeroflow Breastpumps. It was great. They filed with insurance. Requested the script from my doctor. Sent me emails reminding me I needed to get new pump parts to keep things hygienic. Aeroflow Breastpumps took a lot of the pressure off me as a first time mom. Navigating pregnancy and insurance as a first time mom is stressful. Aeroflow Breastpumps did a great job taking a lot of that stress off.

Short-term Disability

She looked like an old bald man for months. I miss these nap times so much.

If you become bed ridden due to pregnancy, make sure your short-term disability if approved for that. Mine was. My maternity leave COULD NOT be used for that because of how my workplace had their maternity leave set up. Short-term disability is relatively inexpensive too. If you end up needing it, it can make sure you keep 60% or so of your paycheck. That’s huge and can mean a big difference while getting ready to have a child.

I got it and it was only a few dollars a month.

Just make sure you need it and your plan will cover things like being bedridden. Short-term disability can generally not be used for postpartum care.

Start Buying Baby Diapers Early

Sounds odd but we started to buy diapers early. DON’T buy a ton of newborns. You will go through a lot but they grow out of them quickly. You don’t need that many cases because so many come in a bag/box/container. My daughter was less than 6 pounds when we brought her home and we had her in preemies for a week. We still only had her in newborn diapers for maybe 2 cases. We moved into size 4 at around 11 months. Size 2 and 3 is what we used the most during that first year of life.

Some might seem duh. But there was a lot I didn’t know as a first time mom and things that I did thinking I was setting myself up for a big vacation ended up being a happy extra nest egg for Evie’s extra little needs.

Thank you so much for reading. Let me know in the comments if there’s anything else you did that’s helped you out.



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