Since I announced Half Penny’s impending arrival, I’ve heard two questions asked with equal gusto: “What do you mean your maternity leave isn’t paid?” and “You know kids don’t have to be expensive, right?”. And the best part is that sometimes the same person will ask both of those questions.
Let me break this down for everyone for once and for all. The sheer fact that I am not earning my regular income for an entire year means this kid will be expensive.
Why We Save
I am taking twelve weeks off without pay–unless I am forced to use a week or two of sick time–and then when I return to work, I’ll collect approximately 70% of my normal paycheck for the remainder of the school year. Tell me again kids aren’t expensive.
While I’m on my FMLA-granted leave, I’ll be sending the district money every other week to cover my portion of our insurance to the tune of a few hundred dollars. I also won’t be paying into my pension, which means I will have to work longer or buy back days if and when I ever get to retire. Now it’s not just a financial expense; time is added to the mix.
And that’s to say nothing of medical expenses. I already know the exact amount of money that my insurance company forecasts this birth costing us. Because if anyone is willing to sit on hold and be connected to three different people with her spreadsheet at the ready, it’s this girl. But there are a lot of assumptions wrapped up in that dollar amount: no c-section, no complications, no nothing. That’s a two to three day, incident-free hospital stay. Quite frankly, I’ve had to leave my car in the shop for longer stretches of time.
All of that is to say nothing of the much-discussed expenses like diapers, formula, and preschool. Never mind cars and college. (I wonder how Half Penny feels about a bicycle and MOOCs?) So while not all kids have to expensive, many of them are. And even if Half Penny comes into this world kicking and screaming at a comparative bargain, I’m not willing to let the adage that “kids don’t have to be expensive” cause financial hangups for us. Because, like all moms-to-be, in addition to the occasional karate chop in my rib cage and the never-ending nausea, I am overwhelmed with the feeling that there is nothing I won’t do or spend to keep this baby healthy and happy. Nothing.
What We Save
Earlier this year, I alluded to the fact that we were already trying to get crafty with our finances to prepare, so I thought I’d share a bit more of our strategy:
Side Hustles – For the past three months, I’ve banked all of my side hustle income in our savings account. Normally, it goes towards the mortgage or our taxable investment account. Not so now. This money is especially important because we can’t actually cover all of our expenses on Mr P’s salary when I’m on leave. But we’re close enough that this side hustle money will actually float the difference.
Year-End Stipends – I earn two really piddly stipends for extra activities that I do during the school year. Mr. P earns a more substantial one for coaching. While most years we spend half on a vacation and save the other, all of these funds are going straight to savings this year.
(No) Extra Mortgage Payments – I can’t even tell you how painful this is for me. February was the last month that we paid extra on our mortgage. Where’s the money going? You guessed it. Savings.
Roth IRAs – This is the only area of our budget that we haven’t dialed back on. We’re still on track to fully fund our Roths by next April. Since this goal will have to be put on hold while I’m on leave, we didn’t feel comfortable scaling back on it now.
The Possible Results
While I won’t know the actual results of any of this money maneuvering until after Half Penny is here, I do know that finding out we were wrong to assume the absolute worst case scenario that kids are, in fact, expensive will leave us with a larger lump sum of savings than we’ve had in a long time. We can use it to start a 529, get a leg up on preschool plans, make a monster mortgage payment, or lots of other things. And out of all the times I’ve been wrong in my life, that sounds like a pretty great outcome.
So if you’re someone who has told me that kids don’t have to be expensive, I hope you’re right. But in the event that this one is, at least we can rest a bit easier. And with the three AM bongo playing on my insides and perpetual heartburn, I’ll do just about anything to sleep better at night.
So Tell Me…Are you doing any saving for the unknown?