When we paid off our house, we had a few people ask, “So is it time to have babies now?”

We laughed and replied, “No, not yet!”  Truthfully, our financial goals and our family dreams were never tied to each other.  I say, when it’s time to have babies, it’s time to have babies.  While you might not be where you want to be yet, you shouldn’t base your decision to have kids on your debt load, net worth, or another financial benchmark.

When Nancy did get pregnant, some 21 months after we paid off the house, I started thinking about the financial implications within the first few hours.  We began discussing, researching, and learning about the various costs of bringing a little one into the world, and we realized that we needed a plan.

Doing things debt free doesn’t happen by default.  You have to be intentional.  We decided over the next few months that we make intentional choices that would help us get to where we wanted to go.

That being said, here’s what we decided to do the following:

1) Re-evaluate our insurance needs.

I wrote about this a couple weeks ago, but you should seriously review your insurance plan.  If you have control over the type of plan you have (i.e. you buy it yourself), then you might be better served going to a higher plan during you/your wife’s pregnancy.  Without preexisting conditions being an issue, you can jump to a new plan during open enrollment.

2) Add a “Baby” category to the budget.

For the last couple of months we have been saving an extra sum of money each month, with nothing specific other than being earmarked for “Baby.”  This does two things: 1) It prepares us for the additional monthly costs of having a child, and 2) It’s building up a small cash fund to pay for initial baby expenses.  We don’t know what we’re going to need to buy, but we know we’ll need to buy something, so the cash will come in handy for that when baby arrives.

3) Register for everything.

We’re still working on our registry, but we’re registering for everything we can think of.  We registered at Target for people to shop locally and Amazon for friends/family out of town.  Is there a chance we might buy this pillow/changer/accessory/attachment/etc. etc. ad nauseum?  Put it on the registry!  Having it on your registry (at Target, at least) also makes it easier to return/exchange and track.

4) Buy as little as possible ahead of time.

We’ve bought a crib and a mattress, but that’s it.  We’ve already received a few gifts, and we had the dresser for the nursery already, but we are waiting to see what gifts roll in.  It’s much easier to save your cash and get that toy/pillow/accessory as a gift or with store credit than to buy it yourself and try to get your cash back later.

We’re taking this even further.  Anything we don’t receive as gifts, we’re going to wait to purchase until after baby arrives.  When baby gets here, it needs a place to sleep, some clothes, diapers, and a car seat.  Simple.  We’re going to see what’s really necessary before we go out and start filling our home with baby stuff.

5) Research.

What’s the most effective diaper disposal system?  What’s the most user-friendly baby monitor?  What are worthwhile accessories, and which are pointless?  Doing plenty of research ahead of time will keep you from wasting money on things you don’t really need or you’ll need to replace because they’re terrible.  Research will also help you find the deals!  I love deals!

6) Cut living expenses.

We don’t really live ostentatiously, so there’s not a ton of money to be had here, but we’ve taken these last few months to review everything in our budget for cost-savings.  That includes giving, saving, investing, fixed and variable expenses.  Anything you don’t need or won’t use after baby arrives, it’s getting chopped.

Lastly, I would say this.  If you are working on debt and starting a family, here’s a plan of attack I would suggest:

– Kick it into high gear.  Before you get pregnant, try to pay off as much debt as possible, as fast as you can!

– As soon as you find out you’re pregnant, pause the debt repayment and pile up cash.  9 months is a good amount of time to sell stuff, work extra, and sacrifice to pile up a good chunk of change.  You’re gonna need it for the delivery.

– Once mommy and baby are home safely, jump back on the debt process with any money left over after paying hospital bills and buying essentials to get your little one squared away.

Hopefully this gives you some ideas and answers for when it comes time to start preparing for a new arrival!  We’re hoping that the efforts we make will pay dividends of financial peace when Baby Ray arrives!

If you’re pregnant, or planning to start a family soon, how are you preparing financially for a baby?  If you have children now, how did you prepare?

Here are two other great posts on the topic from some of my friends! Em for Marvelous and Vallarina Creative