Money Hacks For Growing Your Family (Part 3: Life After Delivery)
You made it! You crossed the finish line and now get to hold that sweet, sweet babe of yours in your arms and look him/her deep into those baby blues! Don’t think you’re off the hook from saving money now, though. In fact, it’s only just begun; let’s talk about how to save some money on that babe post-delivery so you can have another!
1. Look into diaper subscriptions.
Cloth diapers are absolutely the most cost-effective way to diaper your baby, but if you’re like me and can’t stomach the idea of putting poopy diapers in your washing machine (“Hi, I’m Toni, and I’m a germaphobe.”), look into diaper subscriptions. There are some great subscriptions out there that will save you lots of money on disposable diapers. I want you to determine the cost per diaper or cost per unit on these to find the most one. Simply, divide the total price by the number of units (diapers, wipes, or diapers+wipes) to determine your “unit price.” This is the number you’ll compare to find the best price. (Real life example: I’ve found Hello Bello to be the cheapest diaper+wipes subscription at $0.13 per unit. Costco Kirkland wipes are the cheapest, at only $0.02 per wipe.)
2. Register for everything you need.
If you register on Amazon, put everything on your registry, even if you will buy it yourself. First of all, there may be someone who wants to shower you with love and gifts for your baby. Secondly, many registries give you discounts based on the amount of $ spent from your registry, so stuff that you buy yourself could help you earn credit for completion discounts or diaper discounts.
3. Get gender neutral items.
This is pretty self-explanatory. The more gender neutral items you have (including in your nursery design and decor), the more you could potentially save for the next baby, if you have the opposite sex.
4. Shop secondhand and accept all hand-me-downs.
Babies grow so incredibly fast that most “used” items are basically brand new. Get to know and love Facebook marketplace, LetGo, baby consignment stores, and hand-me-downs. It will save you a TON!
5. Don’t forget the college fund.
If you are in Baby Step 4 and beyond, don’t forget to save for Baby Step 5: kids’ college. In Virginia, you currently can take a tax write-off of up to $4,000 per year per kid per parent for college tuition savings into a Virginia529. (If that confused you like it did me, that translates to $8,000 per year per kid.) At minimum, you should aim to save this amount per year from birth to age 22 (that’s $153.85/week or $666.67/month) into a 529.
Depending upon your plan for your child and various other factors, there are a few different vehicles for college savings. Ask your financial advisor about the pros and cons of a 529, an Education Savings Account (ESA), or a Uniform Transfer to Minors Act (UTMA) to select the best savings vehicle for your family.
6. Utilize your Dependent Flexible Spending Account.
Not all companies offer dependent care flexible spending accounts, but if yours does, you’ll want to take advantage of it. It effectively allows you to save pre-tax money into an account to be used for eligible expenses for your kids, such as childcare, tuition, etc, thus, saving you your tax rate on those expenses (think 22%+ savings!).
Just be sure to understand the details of the account. Some are use-it-or-lose-it within the calendar year. For example, if yours is use-or-lose within the calendar year and you have your baby in November of 2020 and don’t send your child to daycare until February of 2021, saving into your Dependent Flex Spending Account for the calendar year 2020 would not make sense.
7. Teach your kids gratitude and generosity.
The easiest way to both build character and save money is to teach your children to be grateful for what they have and be generous with their worldly goods.
Christmas is a typical offender for derailing your progress with this, so don’t be afraid to get your kids involved in giving to others around Christmas. When we were dating, my husband and I started a tradition of shopping for a Salvation Army Angel Tree child or family each Christmas, rather than gifting to each other, and we intend to carry this tradition on with our children.
You can also try out the “four gifts” method of Christmas shopping. This is where you gift your kids with only four gifts each year: 1) something to wear, 2) something to read, 3) something they want, and 4) something they need. If your kids learn to expect (and be happy with) just four gifts per year, imagine how much $$ you will save throughout the course of their adolescent and teenage years!
8. Teach your kids the value of hard work to earn their money.
Talk about another character-building hack. If you teach your kids that money comes from work, they will not only appreciate it more, but they will always strive to succeed in life and go after their goals. Imagine how a teenager might take care of his first car if he had worked for months or even years in an ice cream shop or some other job to save up enough to buy it himself.
These suggestions are certainly not comprehensive. There are so many ways that you can save money throughout pregnancy, delivery, and beyond, but make sure to always keep an eye out for opportunities to save here and there; like the power of compound interest, your efforts to money hack growing your family will pay off with dividends in the long run!
9. Compare your health insurance options to choose the best plan for your baby.
This is an important step that can easily be overlooked. By this point, I think we’ve established that health insurance is confusing. If you thought we were finished talking about health insurance in Part 1: Pregnancy, well, you’d be wrong (sorry!) After your baby is born, you have only 30 days to enroll your child in health insurance. If you are already on the same plan with your spouse and/or you have only one option, you lucked out! You can skip this step.
However, if you and your spouse are on different health insurance plans, you will need to determine the most cost-effective coverage when you jump from either “employee only” or “employee + 1” to “family” coverage.
For this arduous task, I am giving you a gift: time. Below is a link to give you back approximately 10 hours of your life. (At least, that’s how long it took me to compare insurance plans, since my husband and I maintained our separate employer-sponsored health plans after we got married.) You’re welcome.
Simply fill out this spreadsheet with the various health plans available to you to determine which will be best for your new, larger family. It’s not as simple as just comparing the monthly premiums, so I’ve done the heavy lifting for you to factor in the total cost of healthcare, including premiums, deductibles, co-pays, prescription costs, etc. I recommend to figure this out before your baby is born, so you don’t miss that 30-day open enrollment window.