Financial Preparations For A Second Child

Shortly after our big move (which is coming in a little over a month), we are expecting our second child, meaning our two children will be about two years apart in age. Although it’s already clear that this second baby won’t be nearly as big of a financial hit as the first one (we can re-use many things from the breast pump to most of the bottles), there are still many financial factors to take into account. Here’s what we’ve been calculating with regards to child number two.

Diapers Now that we have our own washer and dryer, we are going to give cloth diapering another go. We have a few of them from our son, but we didn’t use them because the hassle of clothes-washing at our apartment was ridiculous (go to another building and hope that at least one of the two washers is free) and quite expensive (four quarters per washer load; three per dryer load). As our son will go off diapers sometime in the next year or so, this could be a significant cost reduction.

Clothes A lot of our son’s clothes, particularly up to twelve months, are gender neutral. Adding in the fact that aunts and grandmothers are already buying feminine clothing for the girl, we anticipate very little clothing cost for at least the first year of life for her.

Child care We’re continuing with the same child care facility, which is giving us a package deal for our two children, substantially less per child than our current rate. This will be an increase in cost, but not as big an increase as the last time.

Health care Our health care costs overall will stay almost the same. We are going to reconfigure our health care choices upon her arrival, putting us all on the same health plan under a “family” plan. It’s only very slightly more than we’re paying now, so, again, not much increase at all.

A second bed/crib Our current plan is to have the new baby in a bassinet in our bedroom for the first few months until her sleep cycle becomes at least somewhat smooth. About a week after the birth of the baby, the grandparents will come and visit and watch the baby girl and we’re going to spend a day just with our son celebrating the fact that he’s now a big brother. This will culminate in a small party for him where he’ll receive a twin bed that’s low to the ground for him to sleep on – he gets a “big boy bed” now that he’s a big brother. This is almost exactly what my wife and I both did near our second birthday, so we believe it will work. Then, after a couple of months of sleeping in his new bed, he’ll identify that as his bed and thus when we move the baby from the bassinet in our room to the crib in the room that they’ll share, he won’t see it as the baby stealing his bed. This saves us in the long term, as a twin bed will be able to be used for many years and we don’t have to get another crib or an intermediate toddler bed.

A 529 I have already established a 529 college savings plan in my name to be transferred to my daughter upon her birth and am funding it at the same rate as my son’s 529. I did almost the exact same thing with my son, starting it before he was born. This gives her almost a nineteen year run-up on earnings before she goes to college – every dollar I put in now will be worth five or six by then.

Overall, I feel as though we’re in great shape for our second child to join our household.