Yesterday, I talked about the period in my life where my wife and I spent money like it was going out of style in order to obtain a “yuppie” lifestyle. Then, that magic moment happened: we took a home pregnancy test and discovered that a little one was on the way. I can remember that night like it was yesterday: we sat there excitedly holding each other’s hands and talking a hundred miles an hour about this child, our child, and what it all meant. I didn’t know it then, but this was to be the event that was the straw that broke the proverbial camel’s back.

The first mistake we made was insisting on only the “best” (read, most expensive) things for our child. We bought a ridiculously expensive crib, multiple layettes, multiple carseats, and so on and so forth. Perhaps the pinnacle of the overspending is when I had a slightly smaller duplicate of my own dresser made for him. We had this vision of a perfect little nursery in our heads and we were going to have it at any cost.

The little things added up as well. We bought him lots of toys, only to find out that free toys are often much more entertaining. We bought piles of wipes and diapers and such without understanding that we were spending our baby budget in nonsensical ways.

Now that we had all this stuff, we found out we were sorely unprepared for the day-in day-out costs of having a baby. Diapers, formula, wipes, clothes that he seems to outgrow every day; it’s a continuous cost that you’ve basically committed yourself to for, oh, the next eighteen years or so. We were completely unprepared for this new financial reality and we soon found that we didn’t have nearly as much money as before.

The lifestyle changes that the baby brought also brought a second wave of changes on us, and accounted for a second mistake: we spent money instead of coping with our lifestyle changes. For instance, we started eating take-out most every night simply because we were spending so much time with the baby and his night-time feedings were making us both worn out. We also travelled quite a lot when he was about three months old simply to show him off to others instead of inviting his many well-wishers to come and visit us, which would have been cheaper and more convenient but was alien to our lifestyle of showing off.

The real problem was that we were unable to separate what our child actually needed from what we wanted. We deluded ourselves into believing that buying all of this stuff for him was actually going to benefit him. The reality of the matter is that it doesn’t matter if it is a $50 crib or a $1000 crib, he’s still going to stand up in it and chew on the railing and he’s still not going to remember it when he’s four years old. The only difference that it makes is to us, so that we could feel some sort of parental glow when we saw it, but the child in the crib ended up counting for more than the crib ever did.

If you haven’t put the pieces together yet, things were just about to collapse. Bills were piling up left and right and it would only take a few things for the whole house of cards to collapse. Let’s just say you should tune in tomorrow for part eight in this series. It’s titled “Meltdown.”

Want to jump quickly to the other Road to Financial Armageddon posts? Here’s an index to help you out.

#1: The Earliest Mistakes
#2: Early Profits … Lost
#3: Cash & College
#4: The First Taste of Real Money
#5: Love & Marriage
#6: The Yuppie Years
#7: Here Comes Baby
#8: Meltdown
#9: The Road to Recovery
#10: What I Learned