The Top Five Pre-Baby Money Matters to Discuss with Your Partner Now
- Stay-at-home-parenting. Not everyone wants to be a full-time parent, so discuss your personal desires at length. Do want to resign? Draw up a detailed budget to know if living on a single income is doable. In many cases, it requires significant downsizing, so be sure you are both committed to living within tighter financial constraints.
- Your family's future. Now is the time to dream and plan. Do you want a new home or home improvements, a better or second car, to take exotic vacations, or pay for private schools or higher education costs? Discuss and prioritize your goals, and then start funding them with regular contributions. PS, don't forget an emergency account - it's an essential part of every family's savings plan.
- Your spending habits. Whether one or both of you will be earning an income, you are now a family and must act as a unified force. Talk about and set spending limits, keeping your partners level of comfort in mind. There are a lot of new products you'll be buying for the baby and it is easy to have conflict over what you need versus what you want.
- Credit and debt. If ever there was a time to get a handle on debt and credit issue, this is it. Even if you are debt free now, babies come with a lot of new expenses that can easily wind up on plastic. Log onto www.annualcreditreport.com to check your credit reports and make sure all is correct. If you are currently holding onto consumer debt, concentrate on repayment. Commit to never charging more than you can afford to repay in a few months' time.
- Money management. Who is taking care of the bills in your home - the person who has the time and the know-how, or the one who always seems to lose the paperwork? Choose the right money manager. As new parents, you'll soon be lacking sleep and concentration, making even simple financial tasks challenging. While you're at it, streamline your finances. Set up online bill-pay and direct deposit with your bank and arrange an automatic savings plan.
Erica Sandberg is a money and credit management expert who regularly appears on Businessweek-TV, Forbes Video Network, Fox Business News, and Bay Area networks. She writes and consults for such magazines and websites as Babytalk, Redbook, Bank Investment Consultant, SFKids.org, MSNMoney.com, and Smartmoney.com, and developed the "Prepping Your Finances for Baby" course for San Francisco's Day One parent education center. Prior to her current work, she spent over ten years at Consumer Credit Counseling Service where she advised individuals on financial matters, led educational seminars, and served as the agency's primary media spokesperson. Her book, Expecting Money: The Essential Financial Plan for New and Growing Families, received Publisher's Weekly starred review, and has been excerpted by MarketWatch, MSNEncarta, and Pregnancy and Newborn.
Buy the book on Amazon: "Expecting Money: The Essential Financial Plan for New and Growing Families"