New Dad Finances: Part 3

In Part 1 of this series, we looked at the preparation steps for becoming a New Dad.  In Part 2 of the series, we discussed a few items that are good to know when the medical bills from the delivery start rolling in.  This part focuses on your changing budget as a New Dad.

Step 5:  Your New Budget

Now that you have a child in the house, you have to accommodate that change in the monthly budget.  You’ve probably read studies that it costs several hundred thousand dollars to raise a child.  That may be true, but that’s not including the mitigating effect of health insurance, either.  If you had to front the money for all medical expenses associated with having and raising a kid, then I would agree that it would cost a fortune.  Again, I am assuming you have decent health insurance, so I won’t bother with the monthly costs of routine health care such as vaccinations and such (most insurance companies deem these “well visits” and the cost of each visit is really low or free). 

The true monthly costs that you will have to cover include diapering essentials (wipes, creams, powders, etc.), and formula.  Of course, you’ll have to buy clothes as they need them, but if this is your first child, you probably have a TON of baby clothes from the baby shower (you did have one, didn’t you?).  You can even mitigate the cost impact of the formula if you sign up for discount programs through each company.  For example, Similac offers their Strong Moms program that sends you checks for their formula every so often, and it’s free.  Similar things exist with the Enfamil brand. Sign up for all of the free programs you can with each company.  I mean, why not?  It’s free and it saves you money. 

Realistically, you should expect to spend an extra $100 each month for the first several months.  When they get a little older, around one year, you won’t have to worry about formula costs.  Honestly, it’s not ridiculously expensive to have a baby.  The month to month maintenance costs aren’t crazy like some internet news articles proclaim.  I’ve read the same articles.  They’re nonsense.  Not every child needs to be wrapped in brand name diapers (seriously, try to remember what purpose diapers serve).  If you are hell-bent on buying the best of everything, then you should plan to spend roughly three times as much, if not more.  And you probably should be reading a different book.  I’m not saying that you should be buying your formula off of Craigslist (never do that), but you should be responsible with the household income.  Target brand diapers work just fine.  Wal-Mart brand formula works just fine.  Find what works, and stick with it.  Kids aren’t that expensive, at least not now.  In fifteen years or so, when they hit those fantastic teenager years, it will be a different story.  But hopefully your family finances will continue to improve every year as you grow into your career, as well.  Hopefully this chapter has helped to put you at ease a bit regarding the finances involved with your little one.  In the following chapters, we’ll cover some of the more technical aspects of being a Dad, such as feeding, swaddling, and the other essentials that will enable you to survive the first month of fatherhood.