How having a child helped us save more money

When I found out I was pregnant last year, I spent some time crunching the numbers and worrying about how we would afford it. Any time I talked to current parents about how they found money for daycare and diapers and such, their answer was typically something to the effect of “it all just works out.”

Now that we’re 10 months into this parenting gig, I have to say they were all right. We pay a crazy amount for daycare, but other than that our expenses have been manageable. In fact, this year I paid off my car (early), and my spouse and I have both increased our 401(k) contributions.

Here are some things that helped us get here:

Baby stuff. I am lucky to have a couple of close friends with kids not much older than mine. We have been the recipients of borrowed clothes, toys, baby bathtub, play mat…the list goes on. We were also very blessed by friends and family at our baby showers as we received nearly everything we needed for the first 6+ months of babyhood. In addition, we have grandparents who have gifted a few toys and clothes and send us diapers monthly from Amazon.

We didn’t go overboard decorating the baby’s room. I bought a well rated, inexpensive crib on Amazon (with my Amazon registry completion discount). My mom gave me a very sturdy old dresser to use, rather than us buying a fancy new one (and we just put a changing pad on top rather than buying a changing table). Instead of buying a glider rocker, we re-purposed an Ikea Poang chair and put a new cover on it.

Food. As a DINK (double income, no kids) household, we went out to eat quite a bit pre-baby. We are foodies. Going out to eat is a form of entertainment for us.  Now that we have a kiddo, it’s often a lot easier to eat at home. We meal plan before our weekend grocery shopping and focus on fast meals for weeknights (which my husband makes) or meals that I can prep on Sundays. I’m pretty lucky – my husband is a good cook!

Our daughter is now at an age where she is eating solid foods regularly and this has really made me look at how we eat. Most of the time she eats what we eat, and if she can’t eat what we’re eating, it’s probably not that healthy. It has made me a lot more conscious of planning meals that are well balanced and nutritional. It’s not particularly easy to find meals that meet those criteria when you go out to eat.

My spouse and I both like going out to lunch during the week too, but we’ve also cut back there. As part of our meal planning I usually target a couple of meals that will make good lunch leftovers.

Alcohol. As a new parent, I’ve found alcohol and sleep deprivation (or disrupted sleep) generally don’t go well together. While I’ll still enjoy a good beer or glass of wine sometimes after the little one goes to bed, the quantity has lessened and it typically is consumed at home rather than at a bar or restaurant where the cost is 3x as much.

Entertainment. We only have one babysitter at this stage and her name is Grandma and she lives 2 ½ hours away. So at this stage of life we don’t do much in the way of concerts, sporting events, movies, etc. We do sometimes have a date night when my mom visits but other than that, our entertainment budget consists mostly of Netflix and HBO Now.

Travel. Some people travel quite a bit with their little ones. I guess one of the advantages (or disadvantages?) of being older when having a child is that we’ve both done a lot of kid-free travel, which makes traveling with a little one sound a lot less appealing. I’m excited to travel the world with our daughter, but for the next couple years it will mostly be road trips rather than ambitious air travel.

Taxes. I contribute the max ($5,000) in a dependent care flex account through work. Even though we’ll spend more than that on daycare this year, it does help offset the tax burden. Knowing we would have a lot of out of pocket spending for medical this year since we had a baby, I also contributed the max to a flexible spending account. The flex account deductions and our 401(k) contributions all reduce our taxable income and ensure we’ll qualify for the child tax credit.

The bottom line is that we are fortunate to have a healthy household income. We had a lot of discretionary spending in our budget previously and we have now become a lot more intentional in how we spend our money.

How have kids impacted your spending and budget?

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