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Baby Fund is Up and Ready!

build emergency fund

This year we’ve kept it short because having having a dozen big goals can be stressful to keep on top of and can decrease our chance of success. Instead for 2011, we have just 3 goals:

  • Bump Up Our Savings for the Baby – We want to increase savings to cover baby expenses.
  • Build Our Car Replacement Fund – We want to buy our next family car with cash.
  • Pay Down Student Loan – This is a reach goal and we’re hoping that we’ll be able to get the balance paid down a bit quicker.

I’m happy to report that we have achieved the first goal. Our savings has been bumped up and it’s ready (as much as you can be) for the baby’s arrival next month. Our tax refund finally came in and it helped topped us off.

Baby Fund: Why We’re Saving

We’ve been comfortable with our emergency fund/savings in general, but we wanted to step it up. We’re now trying to be a bit more conservative -having a full six months of essential expenses tucked away makes us feel a bit more comfortable. Between diapers, baby gear, and unexpected baby expenses, we wanted some peace of mind knowing that we can cover these bills as they come.

Though we expect some expenses to decrease (less eating out for example), we want to play it safe and assume in our estimates that we’ll see an overall increase as we get adjusted to being parents.

Our Hurdles with the Baby Fund

I have to admit -saving was harder than I thought these last few months. When I first wrote about our financial goals for this year, I was pretty confident that we were going to make it. We had a system in place and a plan of action. Truth is you have to anticipate some hurdles when setting up goals.

I had mentioned earlier this year that money saved from food expenses will be going towards the savings account. I was basing that on the fact that in my first trimester I wasn’t really eating much. Well guess what? The next few months I started eating more than usual.

We also had to deal with baby expenses along the way that would work for us. We got out of the habit of doing a few big trips for items and switched to several smaller trips throughout the month. What happened is that as we made the smaller trips, we picked extra items. Those extra items added up throughput the month.  While we had many of them on our list, we didn’t shop around to see if we were getting a good deal or not. We just got them because they were in the same store we were in.

We’re now back on track, but we have to remain on top of this, especially when the baby comes. I know we’ll be crunched for time and it can be quite easy to go for convenience. At the same time we have to be balanced and give ourselves some room for transition.

I’m curious to hear from all you parenting veterans on how you manage to stay focused with a new baby.

Our Baby Fund Strategy

For us automated savings is the main plan. Whenever we get a windfall such as a tax refund or bonus, having an automated deposit or transfer has helped us stay on course. While we have created some sub-savings accounts at ING Direct for specific goals, we decided to keep this in the general savings account.

If we find that our balance is steady and we haven’t dipped into it much with the new baby, we’ll reevaluate and decide if we want to use a chunk of that money for one of the other financial goals that we have. Right now, though, we rather have the money there in case it’s needed to smooth out any spending bumps that may come up over the next 6 months or so.

Thoughts on Savings and Financial Goals

We shared out progress, how about you? Since it’s  halfway through the year, how are you doing with your financial goals? Have you had any hurdles while working towards them? What has been going well? Please share your thoughts – I think it’ll be great to learn how others have accomplished their financial goals as couples.

Photo Credit: epSos.de

by Elle Martinez

Elle Martinez helps families at Couple Money achieve financial freedom by sharing tips for reducing debt, increase income, and building net worth. Learn how to live on one income and have fun with the second..

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Comments on this entry are closed.

  1. My main goal related to losing weight this year. I have done pretty well being down 15 lbs allow this past weekend was a killer with 2 picnics. I am hoping to just break even this week although even that will mean salad for lunch the rest of the week.

    1. Congrats on losing the weight. Picnics can be difficult, especially if you have some great cooks around that have tempting dishes.

  2. Congratulations! We’ve had hurdles all throughout the year and it’s been virtually impossible to save. I think I may just bite the bullet, open up an ING account, and start saving $25 at a time. It sucks, because I was previously saving $200 every pay period, but you’ve got to start somewhere.

    1. I understand – some of the best plans go out the door when life happens. Fantastic job on saving every pay period. Even if it’s a smaller amount, that’s a great habit. I wish you well on the rest of the year!

  3. Staying focused with a newborn is just about impossible. However, you might be too tired to spend money on anything but the essentials!

  4. Exciting–just a month away! Congrats on setting up the extra cushion.

    We made a goal to save 50% of our take home pay this year (in various accounts, but in permanent ones, such as retirement, savings but not vacation accounts). We have come in at 44% for the first six months, so not bad! We have 6% to make up in the next six months…we’ll see how that goes.

  5. Even with the hurdles it sounds like you are doing damn good. My goals have been much simpler and revolve aorund just stock piling as much cash in one place as I can to pay down my debt. However now I have cash sitting around I am starting to think about investments and other things.