Become a Better Spender Before Baby

By Lauren Lisle

Financial Expert: Michael J Garry, CFP

Bringing a baby into the world can feel understandably uncertain and possibly raise a few doubts for a mother-to-be: Will I figure out how to juggle caring for myself and a newborn? Will I be a good mom? Will I be able to afford life with a new baby?

Preparing financially for your budding babe is sound advice that expectant parents receive early on from family members, friends, and strangers alike. Saving to cover expenses for necessary baby gear (like a car seat and stroller), labor and delivery, and everyday necessities (such as diapers and more diapers) is smart, but what if you also had the proper margins in place for the rest of life’s costs without financial strain? For the average twenty-or-thirty-something young adult trying to well, adult, this sounds great, but how is financial stability actually achieved?

As one of those still-figuring-it-out twenty-somethings about six years ago, I was shocked to see the two pink lines staring back at me after taking a pregnancy test at work (because I just couldn’t wait to get to a more suitable place to receive life-changing news). As one of the rare college graduates without student debt, my finances weren’t exactly in a hole, but they certainly weren’t ready to support a child.

To paint a clearer picture: the first time I tried to put a budget together for my living expenses, I grouped groceries in with my miscellaneous fund because I was dining at restaurants or grabbing take-out for meals 90 percent of the time. I clearly wasn’t worried about conserving money (ignorance is bliss, right?), and I also wasn’t making a plan for success with my income, which sent me into a full-on panic once I realized I was pregnant—and I’m not alone.

According to the American Psychological Association (APA), 72 percent of adults report feeling stressed about money. And for growing American households, a 2021 survey found that around 45 percent of new parents say they weren’t financially ready to have a baby.

Concerns over money are often exacerbated when a woman is expecting; when anxiety and financial stress are present during pregnancy, a mother is more likely to have a baby with a lower birth weight, according to a study published in the Archives of Women’s Mental Health. Furthermore, financial stress has also been linked to anxiety and depression, as well as physical symptoms like migraines. Having a firmer financial foundation before getting pregnant will help reduce the chances of experiencing these issues during pregnancy.

While it’s true you can never fully prepare for parenthood, you probably have a hunch if your buying habits could use some tweaking beforehand. The small changes you make every day can have a great financial impact that goes beyond intentionally saving for a big event like birth (though we totally support that effort as well). By becoming a better spender now, you’ll develop healthier money practices that will translate to long-term financial success and benefit your future family’s well-being as a whole.

Start at Point B: Your Budget

Understanding how to become a better spender starts with knowing exactly where your money goes each month, according to Michael J. Garry, a certified financial planner practitioner and member of the National Association of Personal Financial Advisors (NAPFA) in Yardley, Pennsylvania. “Start by categorizing your spending from last month. If you get surprised by something, dig deeper and go back three to six months,” he says, “Most people are somewhat surprised by some aspect of their spending.”

Mom Renee K. found organizing a detailed budget to be a freeing exercise versus a restrictive one.

“Just taking a high-level view of all your income and spending can be a huge eye opener. Creating a realistic line-item of spending gives you freedom to make decisions while being cognizant of the high-level amount you’ve got,” she explains.

“I spend money on Dunkin’ every week. Instead of trying to restrict [spending] and making myself feel guilty, I just created a line item for it and realized that money is going towards it. I’ll need to adjust and reallocate funds for other things like groceries, outings, takeout, etc. Just reframing the mentality of organizing your finances so it’s not a shameful thing was helpful for me.”

It may seem intimidating, but going through your past transactions is the only way to create a realistic budget, versus guessing how much you spend in a certain category. So, grab a calculator, open up your bank app, and start digging. Once you add up your monthly expenses, you can create a budget that reflects your current spending and financial goals.

Free budget apps like EveryDollar or Goodbudget make it easier to keep up with transactions, such as housing, food, transportation, medical, lifestyle, and everything in between. Being mindful of your spending will help you identify patterns to look out for the following month. Additionally, apps are great for keeping you and your partner on the same page and accountable to your bottom line, whether it’s to save more, spend less in a certain area, or simply stick to the budget.

Have a Plan for Your Debt

Debt is the other four-letter word and can wreak havoc on your mental health and overall outlook on life. Whether it’s a student loan, a hefty medical bill, or the result of high-interest credit cards, debt requires a routine plan of action to get rid of it—and the sooner, the better.

When dealing with her own student loan debt, mom Naomi K. says paying attention to interest rates when making payments was key.

“Pay off debt with highest interest rates first. For example, I had multiple student loans and each of them were a different interest rate, and I was just paying a little on each every month,” she explains, “Once I realized what was happening, I paid the minimum on the one with the lowest interest rates, and any extra money I had I put toward the one with the highest interest rate.”

This same rule can be applied to credit cards, medical bills, loans, and any other outstanding debts that accumulate interest. By having a budget in place, you’ll know how much money you have leftover each month to put toward your debt.

The hard part, of course, is having the discipline to not spend those allocated funds on other things. Like any big commitment, knowing your why is important to help you stay motivated. It may also be helpful to track your progress somewhere visible, such as on the refrigerator or a bathroom mirror, so you can see the payoff of each payment.

Live Within Your Means

One of the best strategic habits to form for financial responsibility is living within your means, which simply equates to spending less or equal to the amount of money you net each month. Of course, this is often easier said than done, as resources like credit cards, loans, and spare funds (such as a savings account or an emergency fund) allow for more spending than what you could afford on your income alone.

My favorite philosophy on money is “Move by the speed of cash.” It means to buy something when—and only when—you have the money for it, period. While I also believe debt can be a helpful tool for home ownership and other investments, this practice helped me curb my tendency to buy now and pay more later on unnecessary things.

To know if you’re living above or below your means, try a method called “backward budgeting.” Write down your income, then start subtracting each expense you pay each month. (Like creating a budget, you’ll need to look at your actual transactions from previous months to get a true picture of your spending.) If you go below zero, you’re spending too much.

A great place to start scaling back on spending is by avoiding using credit cards. Cut them up for a period of time if that’s what it takes. This is about creating real change in your spending habits to benefit your future family and achieve financial freedom before a baby arrives.

Instead of charging for purchases, save up the money needed until you can buy in cash. This is where the real discipline comes into play, as it eliminates the ability to make regular impulse buys.

Unfortunately for some, relying on credit cards is the only way to make ends meet on their current income, but it’s not a sustainable practice long-term.

“If you are living paycheck to paycheck, if possible, figure out a way to earn more money. If you can’t do that, try to figure out what you can cut out,” says Garry, “It’s not easy. I was there for a long time after grad school, and it took extra income [working at night] and spending only cash to make it work. It’s a lot of hard choices, but I made it through and others can, too!”

Other options to consider are finding a new job that pays more or supplementing your income with additional work. Dad Jarrod S. says that side hustles are a great opportunity both before having kids and during parenting thanks to the flexibility of scheduling.

“Learning how to manage the financial reality [of parenting] that you’ve never had to deal with before will be hard for anyone. Having the money from a side hustle to cushion your learning curve could be extremely beneficial for mental health and the bank account, he says.

“Think about becoming an Uber driver or doing grocery delivery, virtual tutorial, or teaching English to children online, which pays up to $22 per hour. None of those jobs are going to pay your bills, but they can help you play more offense than defense with [your spending].”

Other things to consider are adjusting your tax withholding (if receiving an annual refund) to add more money to your paycheck, and ensuring you’re taking advantage of any company-provided benefits that can improve your personal situation, such as a Flexible Spending Account (FSA) to put toward childcare and healthcare expenses. (If you have questions about an FSA or other employee benefits, your Human Resources department can help.)

Find Joy in the Present

To become a better spender, it’s also important to adjust your perspective as needed. In doing so, you’ll (hopefully) find gratitude in what you have and what you can offer.

Try to resist the temptation to compare yourself or feel the pressure to have the same material possessions as others. (Spoiler alert: Comparison and impulse buying don’t go away when a baby enters the picture. In fact, they can intensify.) Instead, find small ways to enjoy your expendable income that don’t break the bank.

“A smart spender will choose to spend their discretionary money in a thoughtful way on things that bring meaning to their lives or creates joy,” explains Garry, “[Cutting back on spending] does not mean you can’t buy a cup of coffee outside of the house. If you frequent an establishment because you enjoy the experience and can afford it, I say do it.”

This appreciation for the smaller things in life will translate to parenting, too, when there are more wants and needs to manage.

“When we had our daughters, I was so stressed and worried about money that I couldn’t find joy in the things we did for [our children] or the things we gave them for too long,” says Garry, “Enjoy the time and know that everything will work out. My father-in-law gave me that advice, and I wish I had taken it sooner.”

Above all else, Garry says the most important takeaway is knowing that financial planning is the ultimate foundation for lasting stability.

“Making sure your cash flow, savings, insurance, investments, college planning, retirement planning, and estate planning are [eventually] all in order is the best way to live. At whatever income or wealth level you are at, if you keep on top of those items, you will be able to do the best you can with your own particular situation. Those who plan tend to do far better than those who don’t.”

Remember that financial stability is a marathon, not a sprint. By starting to implement these practices before growing a family, you’ll have more time to establish good habits without the overhead stress of caring for a child.