Nothing is more exciting than telling your spouse, “We’re going to have a baby!”
The pregnancy test initially reveals this fact, but when the doctor officially confirms that “Yes, you’re going to have a baby!” many thoughts besides the exciting ones will zip through your head.
A new mother may be thinking about all of the things she might need to make sure the baby will be healthy, like preparing her body physically and emotionally until the baby is born, informing friends and family of the new addition, and even how her job will be impacted.
On the other hand, a new father may be thinking about how this is going to change their marriage, whether will he have enough money to take care of the family, whether will he be a good father, and how is the new baby going to affect his social calendar.
One thing that both mothers and fathers still struggle with and don’t discuss is how the birth of a child is going to affect the marriage financially.
How important is talking about money in marriage when you’re having a baby?
A UBS study found that among millennial couples, 51 percent of women said that their spouse is responsible for handling long-term finances and 75 percent of the men agreed they still take the lead.
What was refreshing about that study is that most of the couples wanted the paradigm of their financial situation to be different.
Also, 94 percent of the men in that same study want their wives to be more involved financially and 69 percent of the women surveyed wanted to be more involved.
So how do you create a space whereby you as a couple can have a conversation about your finances before your lives are consumed by parenthood?
Here are 10 conversations about money you must have before having a baby:
1. Know each of your views on money
Everyone’s experience with money is different. If you don’t understand your partner’s history with money, it can impact the future decisions you make for your child and family.
For example, choosing a state-of-the-art stroller because it’s the best on the market and the price reflects that versus a functional stroller at a reduced price.
If you’re the partner that chooses the expensive stroller and your partner chooses the functional one, you may perceive this as being cheap. In reality, they just may not feel comfortable having this extravagant thing.
On the flip side, Mr./Ms. Practical may feel your stroller is a frivolous purchase, while you’re choosing the safest option no matter what the cost. Either way, without discussing how each of you feels about money, you will never know.
2. Create a household budget
Most couples don’t understand how much money they will need to spend on the baby until it arrives.
According to the U.S. Department of Agriculture, a middle-income family on average spends a quarter of a million dollars raising a child from birth to age 17.
With that said, you can ease your mind by working together to see where you can cut unnecessary expenses. It would even be helpful to plan a trip to the grocery store to price out the costs for your newborn.
Advanced planning will make the transition to parenthood easier.
3. Create or beef up your emergency fund
Creating an emergency fund to cover 3 to 6 months’ worth of living expenses is ideal.
This is an important thing to discuss now because when you’re pregnant, in approximately 9 months, your financial situation will change and a major chunk of your money will go toward the care of your child.
You have control over where your money goes, but the one thing you don’t have control over is a loss of employment. If that happens, you want to be prepared to have a cushion so don’t have to take on debt to stay afloat.
4. Do you have life insurance?
Of course, you may never want to think about life insurance because that signifies the death of a spouse. However, the addition of a child in your life means that this is an important conversation to have.
Life insurance, especially term life insurance, helps protect you and your loved ones against the loss of income in the event one of you dies.
5. Create an estate plan
This is the cousin to having life insurance. According to a 2019 study by Caring, 57 percent of U.S. adults do not have estate planning documents such as a will or living trust.
Without certain legal documents, gaining control of your assets can become confusing, complicated, and difficult for your family in the event of your unexpected passing.
Not to mention, assigning guardianship to your child in case both you and your partner pass.
6. Don’t feel the urge to buy a new home right away
Since you have to hold onto more cash in the first few years, it’s advisable to not make this major purchase.
Yes, you can equate moving as part of the process of starting your family, but the home-buying process is tough and stressful enough. If you can delay this next step in your marriage journey, it’s definitely something to talk about.
7. Pay down your debt.
If you’re between the ages of 18-34, your major debt is probably your student loans. If that’s the case, make a plan to pay down as much of it as you can.
8. Develop a team approach
This is especially important if you decide as a couple that one of you will choose to stay at home with your child. Sometimes, the spouse bringing in the most money can feel entitled, while the stay-at-home spouse has no say.
You’re just asking for more money and relationship troubles. Remember, it’s not “yours” or “mine” — it’s “ours.”
There’s no reason to hold a higher income as leverage over your partner. You’re on the same team. Figure out how to create that mindset.
9. Seek out a financial planner
With time at a premium, once the baby is born, your do-it-yourself can easily turn into no-one-does-it. And making a rash and uninformed decision can have unintended consequences in other aspects of your life.
Hiring the right financial advisor is worth it because of their ability to keep you on track and proactively identify financial risks and opportunities for you and your spouse.
10. Schedule regular money conversations
Just because you check off all other nine items, that won’t completely satisfy handling your money as a couple. You should set aside regularly scheduled meetings to talk about your financial situation.
The time constraints and how quickly time flies when you’re raising a child can make your conversations about money go from a month to two months, or even years without creating space to have these talks.
Being intentional in regularly discussing your financial goals and decisions will increase your confidence and reduce additional stress.
Adding a new member to your family is so exciting, but comes with a lengthy list of responsibilities, and understanding and tackling your finances is one of them.
Don’t try to do them all at once, work together, prioritize, and tackle the most important items on your financial to-do list first.
With 18 or more years until your little one leaves home, time would seem to be on your side. But — as the saying goes — blink and they’re all grown up.
Taking the steps that will set your family up for financial success now will secure you all for a lifetime.
Keith Dent is a writer, blogger, and certified empowerment coach. He is the author of In the Paint: How to Win at the Game of Love.