Having a Baby Changes What?

Posted by Mrs Money on May 28th, 2009

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This is a guest post from my friend Kacie at Sense to Save. Be sure to stop by her blog and say hi!

It’s true that having a baby will impact your finances. Naturally, you’ll have to budget for diapers, gear, clothing, college and all else that comes with having a child. But surprisingly, having a baby can have a positive impact on your finances. My son is just five months old, and his mere presence has helped us save money in a variety of ways.

1. Our entertainment spending is more purposeful. In these early months, we haven’t gone out to eat in a ‘fancy’ restaurant, gone to movies or enjoyed expensive entertainment. Instead, we visit baby-friendly cheaper restaurants and venues or just plain stay home. Our entertainment spending has gone down as a result. As he gets older, we’ll seek frugal forms of entertainment and save the expensive restaurants for special occasions.

2. We had extra motivation in becoming debt-free. We reasoned that the sooner we were out of debt, the sooner we’d be able to increase our retirement contributions, save for a house, and save for our son’s college education. In addition, being in debt, living on one income and having a baby was stressful. Kicking our debt to the curb helps me sleep better at night (at least until my baby wakes me up!).

3. One final bonus: The child tax credits have reduced our federal tax obligation by at least $1,300 for 2008 (thanks to the stimulus package of the same year). Each year until our son reaches adulthood, we’ll be able to claim him on our taxes and have a lighter tax load.

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3 Responses to “Having a Baby Changes What?”


  1. Miss M says:

    I think the calculation will be different for everyone, for example we hardly go out anyway and never spend much on entertainment. I think a kid will cost us more in that respect, but for many people children mean no more going out, no more expensive vacations etc. Kids change your finances, they don’t necessarily make them worse.

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  2. Mrs Money says:

    Miss M- True! We don’t spend much on entertainment either and probably would spend more taking the baby to the zoo, etc. I think it’s going to be interesting to see how our finances change when we have a baby!

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  3. I have just started watching the popular tv reality show called Jon and Kate Plus 8 to get a sense of such an enormous burden children of that size can have on a couple and surprisingly they are managing things well and have brought up some of your points.

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