New Baby Expense Tracking

Posted on January 2, 2009 in Baby Expense Tracking 5 comments

budget

Another goal I set for myself last year was to keep track of how much money we spent raising our second son through the first year.  In this initial and also this follow up entry, I provided some background as to the categories I thought would be relevant.

As expected the biggest expense were medical bills.  Even though my son is healthy, he had to have a minor surgery when he was around 10 months old.  This put his medical bills at almost $6,500 for the year, of which we had to cover $1,500 out of our own pocket.

We saved a lot of money in diapering and feeding the baby.  Using coupons, extra care bucks and register rewards to pay for diapers.  In average I paid $4 per pack of diaper my son went through during his first year.  $240 was the total spent for the whole year.  In contrast this article puts a tag of about $100 a month that could be spend on diapering a baby.  Breastfeeding and making his baby food also allowed me to save a lot of money on feeding him since I did not spend any money on expensive formula.

In total our out of pocket expense for the first year was $2,120.  This is a fraction of the estimated $10,000 the article mention.  Of course, the article includes maternity leave and childcare costs which are not applicable to us.  I know that if we were still living back in the Philly suburbs our childcare expense alone would be about $10,000 for the year.

I know many parents are stuck with high daycare bills that can bust any budget.  But even smaller savings from using coupons to save on diapers, making your own baby food, breastfeeding or using formula checks and coupons can help make the financial impact of raising a child.

See the complete spreadsheet of expenses here.

Baby Expense Tracking: Six Month Update

Posted on June 3, 2008 in Baby Expense Tracking 4 comments

Did you think I had given up on this one? Well, no I am still tracking expenses for my youngest son. He turns six months old today and I figured I would update how we are doing on spending money on him.

  1. Clothing: I still haven’t had to purchase any clothes for him out of our own pocket. I did buy him a couple of pajamas using a gift card that was sent to him but nothing else. I do need to get him three or four summer outfits because what I have from my oldest won’t fit him. Luckily I got a 30% off coupon at Kohl’s yesterday so I will be hitting those clearance racks before the coupon expires.
  2. Feeding: I have added the cost of a box of baby cereal ($1.64) to his feeding expenses. He got his first taste of solids this morning (not very thrilled about that), so he has not had anything else to eat but FREE breast milk. I also added the cost of replacement pacifiers to this category ($5).
  3. Baby Gear: This weekend we finally purchased the double stroller we needed. We paid for it partially with a gift card but I have still alloted the full cost ($130) of the double stroller to DS#2 because he is the one who will get to use it most.
  4. Medical Expenses: I have reviewed this expense on my spreadsheet. On my last baby expense update I mentioned around $8K in medical charges. Well after the negotiated insurance rates were applied the actual charges were lower. So far total medical costs are around $6400 and our out of pocket for six months of medical care for our youngest is $1486. We have been using money saved on our Health Savings Account to pay for this charges.

Other than that baby is thriving, just learned how to roll from back to front (lazy baby!) and even though his check up is not until Thursday, I can safely say he weighs more than 18 lbs. A little chub ball that one is.


Three-Month Baby Expense Update

Posted on March 4, 2008 in Baby Expense Tracking, Money talk 6 comments

It’s been three months since I started tracking expenses for my youngest son. Here is an update on the different categories:

  1. Clothing: I have only spend $15 on an outfit I bought him and he quickly outgrew without ever wearing it (yeah, very unfrugal). He has been able to do with wearing hand me downs from his oldest brother. However I do see a kink in this plan. Youngest son was born in December and oldest was born in March. I think the problem will come when summer rolls around because son #2 will be bigger then than the summer clothes we have from son #1. So, I expect this category to grow a little.
  2. Feeding: Except from some bottles I bought before baby was born I haven’t spent any money on this. Breastfeeding has saved us a ton of money.
  3. Medical Expenses: This is where most of our expenses have occurred.
  • Let’s start with the birth, we were charged $2170 by the hospital for his stay and care there. Plus an additional $273 for visit from the Ped while he was there.
  • He had a five day check up and that only cost us $55.
  • Then he had a visit to a pediatric urologist when he was 10 days old for $285 in charges.
  • When he was 3 weeks old he came down with a urinary tract infection. ER care totaled $765, plus two nights hospital stay $3883 and charges for visits form his Ped while he was there of $267. Then he had ultrasound and X-rays done to check his kidneys = $257. 10 days later he had a follow up visit with his Pediatrician $85.
  • Total medical billing so far = $8040. This is the total our insurance has been charged. Since we have had problems with some of those bill submissions our total copay is still not clear so I need to get that straightened out.
  • We still haven’t gotten billed for his 2 month baby check up where he got shots. He is also going for one follow up ultrasound in 3 weeks. However, in general he has been an very healthy baby since the unfortunate UTI.

You can check out the link on the right bar side for the updated expense file. But don’t you think this is worth it?

Born 6lbs 13 oz, he’s now 14 lbs @ 3 months old!

Minimizing Baby Expenses

Posted on January 30, 2008 in Baby Expense Tracking, Frugal Spending 2 comments

I have been getting hits from people searching for information on baby expenses. I decided to write about how to spend less on getting ready and bringing up a baby for the first year. We have all heard it babies are expensive, and they are! If you barely have any room in your budget right now chances are you will be really tight once a baby is added to the mix. But there are things you can do to minimize the squeeze.

  • Pregnancy: let’s start at the beginning. Pregnancy is a time of change and that usually means having to acquire a new wardrobe that you will only use for a few months. My first tip for minimizing costs is try to stay in regular clothes for as long as you can. Being pregnant you probably dream of wearing maternity clothes and rubbing your belly. But the truth is that those cute maternity clothes from the first months won’t probably fit you in your last months. I remember buying maternity clothes and thinking “That’s huge!, I would never fit in that.” Well, the last couple of months those were the only items I fit in. By wearing normal clothes for as long as you can you minimize the number of transition maternity wear you have to buy. My second tip is to invest in neutral, flexible pieces. Buy tops that you can wear with several pants and pants that can be worn with several tops. That way you can maximize the use of the pieces you have without feeling that you keep wearing the same outfit day in and day out. Finally, try to buy pieces that can be worn across the seasons. I know this can be hard in extremely hot and extremely cold conditions. But I suggest this because if you are thinking of having more than one child you might want to buy clothes that you will be able to use next time regardless of when that pregnancy happens.

  • Delivery Expenses: Assuming you have health insurance coverage, if possible contribute the amount of your deductible to a flexible spending account. You will probably hit this amount with delivery costs. Both of my deliveries have been natural and the first time my health insurance ended up being charged $10,000 for obstetric care and hospital charges. Then an additional $5,000 were charged for nursery care for my newborn for the two days he spent in the hospital. You can add a premium to this if you end up with a C-section or, even worse a baby that requires a lengthy hospital stay.

  • Baby Equipment: Stores such as Target and Babies R Us have created lists such as this to help you buy the things you need to be ready for baby. The list is overwhelmingly long and you are probably feeling you will be breaking the bank if you need to buy all of that. But you don’t need it all and you don’t need it all at once. Initially what you really need is a safe place for baby to sleep, a place to change his clothes and diapers, a place to keep his clothes and a car seat. Things such as stroller, bouncy seat, swing, etc are lifestyle needs. My first tip to minimize this cost is set up a registry. The majority of pregnant women get a baby shower, and even if they don’t they still get showered with gifts from friends and family after the baby is born. Have a registry set up so people know what your needs are. Secondly, consider buying used items. A crib, a changing table, a dresser are things that can be safely bought second hand as long as you do diligent work to make sure the items have not been recalled. However, the one item I recommend buying new is the car seat. It’s just not worth it to take the chance on a used car seat. Make sure what you buy will last you a while. You need to get quality items because you will be using them for a while and you might be using them again. Try to skip buying items that only get used for a short period of time such as a bassinet (3 months tops) and a toddler bed (invest on a twin bed instead).

  • Baby Clothing: Let’s not delude ourselves, baby clothes are cute and most people have a weakness for them. This means, this is the area where you will be more prone to overspend. Try to set up a budget during the pregnancy of how much you can spend on baby clothes. Stick to it. You are likely to get a lot of baby clothes as gifts, so let other people spend money on this while you spend money on other things you will need. You will also find that there are a lot of people who want to give you their baby clothes because they are done having babies or their baby has outgrown them. Never say no to these offers. Gently smile and thank them for the clothes. Later on sort through the clothes and if there are any items you might not use take them to Goodwill or Salvation Army. Hit garage sales. Because people love to buy baby clothes these are very common items at garage sales. What’s best, because people tend to overspend on this you can find good quality clothes worn very little.

  • Feeding: Your best bet for keeping feeding costs down is to breastfeed your baby. You will still need to get some gear such as breastfeeding bras. A manual breast pump is necessary if you want someone else to feed the baby while you are not around. Having to go back to work doesn’t mean you need to stop breastfeeding. Nowadays many companies offer facilities to help their employees continue breastfeeding their babies. If there’s nothing like that at your workplace don’t hesitate to lobby for one while you are pregnant. Talk to your boss about your wishes, bring it up to HR. There are also ways to save money if you are formula feeding. Register with formula companies to receive money saving offers. Don’t be shy to have other family members do this too. Sign up with all formula companies even if you don’t use their formula, you can trade these formula checks with other people and save more money. When baby starts eating solids, consider making your own baby food. It saves you money and it allows you to feed your baby organic food in an affordable way. You don’t even have to buy the expensive baby yogurt. All you need is whole milk yogurt and you can always flavor it with a teaspoon of fruit preserves. However, any of this may not be feasible if your baby attends a daycare center. So, again make sure you register with baby food companies to receive their money saving offers.

  • Diapering: Cloth diaper or disposable. It’s your choice. Use websites such as Babycheapskate to track formula and diaper sales weekly to help you identify good deals.

There are many things you can do to take the bite out of baby expenses. These are just some saving ideas on the main expense categories. If I have missed something, please chime in and leave a comment. I would like this post to be as helpful as possible.

For a comprehensive list of where to sign up with companies to receive money saving offers click here.

New Baby Expense Tracking

Posted on December 19, 2007 in Baby Expense Tracking, Budgeting 0 comments

We have all heard it at one time or another: “Children are Expensive.” Just how expensive I wonder? I am setting on a quest to find out. I am committing myself to track how much money my husband and I spend on our new bundle of joy until he turns a year old ( or 12/3/08). I have gathered all of my receipts from what I have spent so far and made an inventory of the items I am reusing with son #2.

One main expense category will be diapering. Now, considering that this is a frugal blog and I like to think of myself as somewhat frugal, you will be shocked to learn that I won’t be cloth diapering my son. Cloth diapering is by many the frugal choice; however, it is not the right choice for us. First, I couldn’t justify the expense on cloth diapers when it seems that each one of them sells for around $12-16. Then you also have to consider that you still have to get different sizes and we will need to get multiples of them so I don’t have to be doing laundry every eight hours. I am sure there are ways to get around my own arguments but ultimately to us it is not worth the hassle. You also have to remember that I have a husband who knows too much about microbes and bacteria growth and what not. We both just couldn’t commit on this issue, so disposables it is. Some of you know that I have a lot of diapers already stocked up (check out the last page of my price book for my detailed inventory). I will be adding the cost of diapers to my tracking spreadsheet as I go through the diapers. This will also be a great way to calculate at the end of the years just how many diapers I used on my youngest son.

For medical care I decided not include the cost of delivery but will include cost of well-baby visits, immunizations and any sick visits. We have a high deductible plan, so we actually do have to pay out of our own pocket for a lot of these expenses. I will go over delivery costs on a separate post for those who might be interested in knowing how much those can turn out to be.

I struggled as to how to account for money spent on furniture. The main reason why I struggled is that I didn’t know how to allocate money spent buying baby furniture that was also used with baby #1 to costs of raising baby#2. But finally, I decided that to make this exercise as close to reality as possible I will charge second son with half of the cost of the items we are reusing with him.

Another big category is clothing, or it could be depending on how well you restrain yourself. Because this is son #2 for us, he will be getting a lot of hand me downs from his older brother. We are fortunate enough that their birth months are roughly 4 months apart and youngest son is so far smaller than my oldest one. So, I expect he will get to use a lot of the clothes my son used. I am not going to be able to allocate any clothing expenses from what I have used with 1st son down to son #2 for two reasons: First, I have been fortunate enough to have a lot of clothes passed down to my children, especially barely worn baby clothes. Finally, any clothes that I have had to buy I have bought on sale or at garage sales and to try to identify each piece and its cost would be impossible for me at this point. So, any clothing costs for this new baby will be entirely for any new or new to him clothes I purchase for him.

The rest of the categories are pretty standard. But I am sure more will be added as the year progresses. On the right column of this blog, under Shared Files you will see the expense tracking spreadsheet dedicated to this purpose. I will also be giving continuous updates and clarifications on some of the expenses.
Edited because I forgot to mention clothing.

Will Our New Baby Bust Our Budget

Posted on December 13, 2007 in Baby Expense Tracking, Money talk 2 comments
Waking up many times at night to care for a newborn, gives you lots of opportunities to come up with new ideas. As I sat in the rocking chair last night feeding our baby, an idea popped up in my head: Forget about tracking our monthly expenses for a month, how about tracking how much money we spend taking care of our new baby for a WHOLE year? It’s a good time to start, he’s only 10 days old, so I don’t have a lot of receipts to compile yet. What do you guys think? Does this sound like an interesting exercise? I have a couple of dilemmas though:

  1. This is baby #2, so I already had all of the furniture from baby #1. Should I assign zero cost to baby #2 or allocate half of the cost to him? The accountant in me says that I should only account for any marginal or additional costs incurred. This means I would consider the passed down furniture and clothing as a sunk cost and not bother adding it to the accounting for the new baby.

  2. At the same time, even though I have stockpiled a lot of diapers, I feel I need to include this in my expenses. Even when I spent the money over the past few months. I think that the cost of diapering is very relevant to the final accounting of how much this baby is going to cost us this year and should be included.

These are the expense tracking categories I have thought of so far: diapering, feeding, clothing, gifts and medical care. I do not think I should include the cost of delivering the baby because I want to focus more on daily expenses over the next year. Have I missed any category?

This article put a tag of $10K or so spent by the time baby reaches his first birthday. I hope I am able to beat it, not only because I didn’t have to incur any big ticket items but also because I don’t foresee spending that much. Umm, I hope this exercise is not another eye opener as the monthly expense tracking one was.