First Person: Adjusting Our Budget for a Second Child

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When I hear a hero or heroin in the movies yell, "Take evasive action!" I typically think in terms of someone acting in an immediate, decisive, clear, defined, and willful way. Well, when I realized my wife was pregnant with our second child, this was how I would describe my reaction -- besides ecstatic, excited, worried, and nervous of course.

For me, finding out a second child was on the way -- even though we'd been talking about and planning it -- meant an immediate alteration of course in our lives, and a re-evaluation of our financial situation, goals, and plans.

Priority Re-list

With my wife heading back to work in a school district, we had set aside about $1,800, budgeted for two summer vacations, one to Washington state to visit my mother, and one to Florida. However, with the possibility of a newborn on the way, and all the associated costs that come with that responsibility, we are beginning to doubt whether this summer will turn out as initially planned. This is fine, but it just takes a little re-sorting of our priorities, putting baby preparations and costs in front of fun and frivolity.

We had also set a little bit more money aside in our entertainment budget -- to the tune of about an extra $100 a month -- as we wanted to splurge a little more this year, but this money is now being re-directed into a "new baby" fund.

Budget Re-do

A large portion of my budget re-do focused on re-evaluating the above planned expenses; however, there was more to it than that. Besides just cutting already planned expenses to make a little extra spending room for baby, there are also the extra costs associated with a little one coming along. Items like medical costs, preparatory items such as a new stroller, baby swing, car seat, etc. and then planning for the re-introduction of things like diapers, wipes, formula, food, and other items that we had previously scratched from our budget once our son hit the toddler stage several years ago, must now be considered.

Such costs are likely to tack an extra $100 to $200 a month onto our budget, and this is after all the big ticket items and doctor bills are paid.

Productivity Hike

Along with the budget re-do comes a productivity hike for me. As a self-employed freelancer and work-at-home dad, this means that I need to be pushing myself even harder in an effort to squeeze out a little extra income before baby arrives. If I can balance the extra monthly hike to our budget with an equal amount of income from my work, the hit our budget is taking might not hurt as bad.

Baby Checklist

To help guide me in my efforts to evaluate and plan for the extra costs that are coming with a new baby, I've developed a baby checklist. This checklist helps me list the various preparations, purchases and supplies that we need in order to make our transition to parents of two a bit simpler. Therefore, I've started a list of baby items and needs (and their associated costs) in an effort to get a better feel for just where we'll be spending and in what amounts so that these costs don't come as such a shock when they hit.

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