A growing family doesn’t have to wipe out your bank account, but new and unexpected expenses can lead to sticker shock or budgeting stress that, in turn, detract from your enjoyment and well-being in early parenthood. Download our guide to postpartum financial planning and use our key points to budget, better, sooner.
Follow these steps to get your planning - and budget - on track for the realities of postpartum life with a growing baby.
- Download our planning guide to postpartum finances
- Identify and understand your expenses
- Calculate and assess your income
- Create a budget
- Review the “big picture”
Identify and understand expenses
Current and future expenses will include must-haves, nice-to-haves, and a buffer for “the unexpected”.
Understanding your expenses may require a bit of due diligence, but getting a picture of your cost of living will help you to plan for adjustments that come with a new child - or identify changes you can make now to augment your postpartum budget. Use our downloadable planning guide for more recommendations of how to:
- Track expenses
- Use a few months of data to estimate 3-12 months of postpartum expense
- Identify flexible versus non-negotiable costs
- Estimate newborn-specific expenses
Calculate and assess income
It’s easy to over or under-estimate our income, and as everyone’s earnings, tax status, and household dynamic are different, it’s important not to make assumptions, which can lead to unexpected shortfalls and additional stress.
Our planning guide has some specific tips for income assessment. Factors such as being single or partnered, a salaried or wage-based earner, and other considerations like community support, insurance, and employment benefits can all make a significant impact on the reality of your postpartum financial resources. We recommend that you and any other contributing members of your household take some time to complete this process as a team, identifying:
- Total combined savings (which is not the same as expected income)
- Actual usable income, including paid time off, realistic estimates of post-tax salary or wages, and confirmed family or community support
Create a budget
A budget is a plan, not a guarantee! Use the information above and the details in our guide to create a framework for sustainable spending and saving from now through your child’s first year of life.
A budget can be incredibly helpful if it’s realistic, and if you and your support team commit to utilizing it to shape spending and saving decisions. While not always “fun”, many new budgeters report a higher level of satisfaction with purchases and less stress when unexpected expenses pop up. We detail more specifics in our planning guide on the following aspects of budget-building:
- Use a low/high estimate for all estimates and incomes so that you can see the best and worst case scenarios.
- Plan based on the lower range of expected income, with a buffer added in for emergencies.
- Use your estimates from above to calculate whether or not you’ll need to save or cut out auxiliary expenses to meet your postpartum needs as a family.
- Assign income to the most important expenses.
Review the big picture
This exercise is designed as a starting point for more detailed planning and adjustments as needed. How did your budget come out?
After you work through our downloadable planning guide worksheet, use the table at the bottom to fill in your own numbers. What is your minimum budget - are your essentials covered? Do you need to confirm your paid time off or other employment arrangements? Once you have a realistic look at your money today and your money tomorrow, you can move forward with any prenatal and postpartum purchases and savings plans, feeling clear on your options and equipped to communicate questions or concerns with your household and employers.
See a 3-month example in the worksheet.