Thanks to BNZ for partnering to help make this post possible.
It’s true, “you are never ready” is more often than not my response when friends and I discuss the age-old question of now, or, later, especially when it comes to having a baby.
My feeling is that you can plan the heck out of the process – make all the lists, read all the books, take all the classes, listen to all the experts (actually, this is probably unrealistic as every person you meet is an expert on raising other people’s children!) but nothing will ever, ever prepare you for the life-changing, maniacal experience of welcoming a baby into the world.
That being said, prospective parents DO have nine months to at least attempt to get their ducks in a row. I feel like I’ve said this 1000 times but, when Dave and I found out we were expecting Ethan, we had NOTHING. Like actually, nothing. I’d been drifting around America for 3 years, surfing and having fun, and Dave had been drifting around for 28 years in a similar state.
We didn’t even have a car and no family in the state of California to lean on. Shit got real, really fast. So, we simply knuckled down and implemented our own simplistic but totally doable envelope based budgeting plan.
As Dave and I were both being paid in cash, it made sense to save in ‘cash’ too. I fully credit the tactile tangibility of the simple envelope system with keeping us on the path to financial responsibility and helping us save for our imminent life on a single income. How does it work? Easy. Work out your monthly budget and create an envelope for each outgoing expense; rent, power, food, petrol, insurance, internet, phone etc. as well as one for saving and one for FUN. On the front of each envelope, make a note of the total monthly amount due, as well as the amount you need to save per week for that expense. Divide your income up weekly between envelopes and voila – complete financial control is yours.
Of course, digital technology and the way we use the internet has changed a lot in the past decade. You can probably ditch the envelopes and use online tools to get your finances whipped into a family-friendly state.
Check out the Baby Calculator, an awesome collab between BNZ, Plunket and Massey University that’s based upon the spending of NZ parents. Since 2010, BNZ has been Plunket’s principal sponsor. As this special relationship builds each year, so does BNZ’s understanding about what families will experience with newborn and young children. If you want an idea of the expenses that will be coming at you – along with sleepless nights, stinky diapers, adoring baby gazes and the best snuggles you’ve ever had in your life – then spend some time online with this invaluable tool.
12.5 years later, Dave and I have two wonderful boys and to be honest, the way we view our finances hasn’t changed a whole lot. We are very debt adverse, we have savings plans in place, we watch our spending and we make a lot of cool stuff happen for our family on the cheap. When we began discussing baby #2 we were in a completely different place both physically (New Zealand vs USA) and financially. We had just purchased our first home and had (somehow) managed to negotiate the crazy-speak of fixed/variable/table/reducing/blah blah mortgage speak. Negotiating buying a house and its subsequent reno was the third-most grown-up thing I’ve ever done (the first was birthing a baby and the second was purchasing a BRAND NEW BED! That’s some adulting right there).
We didn’t use our envelope system to pay for our house, though it definitely helped us on our way. Make sure you take advantage of every helping hand that’s available to you, starting with your bank. Buying a house is a really big deal. Historical loyalties to a bank you’ve been with since you were 5 should go out the window if they’re not prepared to take care of you when the time comes to borrow a LOT of money from them.
Pro-Tip: Look for deals and packages specially designed for people like YOU. A comprehensive option is the Baby Bundle from BNZ which offers a range of advantages;
• Fixed home loans – 0.25% discount on the advertised fixed home loan interest rate for the length of your fixed term.
• Variable home loans – 0.25% discount off standard home loan variate rate, including Rapid Repay
• Legal / valuation costs – Receive up to $1,000 towards legal/valuation costs when buying a new home or refinancing with BNZ.
• Credit cards – $0 account fee for the first 12 months on new credit cards.
• Transaction account – $0 account fee for the first 12 months when you open a YouMoney transaction account.
• Personal loan – $0 loan facility fee and discounted rate on a personal loan.
I started this piece by saying that you can never be truly ready for the impact a baby is going to have on your life. This is fact.
But, you can be smart, you can be prepared and you can be informed.
Visit www.bnz.co.nz/plunket for more information