Thursday, March 22, 2012

{Ask a Mommy:} Finances

I've been meaning to start this 'Ask a Mommy' feature for quite some time. What is it, you ask? In short, it's a feature where I answer a question, either a specific question from one person, or a question I have heard numerous times. Why? Do I consider myself an expert? Heck no, I do not consider myself an expert! The reason I'm doing this isn't to pass on expert advice, but to share my own experiences as I experience them in order to relate with other curious people.

Throughout this new, crazy experience of pregnancy and mommyhood, I get tons of questions from my friends; questions they hadn't been comfortable enough to ask anyone else, or even questions that they never HAD anyone relate-able to ask. The thing about me that all my friends know, is that I'm pretty blunt and will share info about my boobs, personal life, and bodily functions whether anyone has asked or not. I'm just really comfortable with subjects that some people would rather ignore. I've had friends ask me things they would be too embarrassed to ask their more mature friends- wait, does that mean I'm immature? Let's call them 'boring' instead- or things that have never happened to anyone else they knew. So here it is: the first Ask a Mommy!

Q: Can I afford to have a baby?
One of the very first excuses I made for why I couldn't have a baby when I found out I was pregnant, was that we couldn't afford it. And I get a lot of questions about how much pregnancy costs, and weather or not someone on a budget can afford to have a baby.

My Experience: I remember hearing from other older, wealthier mothers how their pregnancy was $5000, and the first year with a baby was an additional $10,000 or some intimidating number like that. I grew up thinking it would be so hard to get to a financially adequate situation where I could have a baby, so when I found out I was pregnant, I panicked.

I had made a lot of financial mistakes in my early twenties and had racked up quite a sum of credit card debt that I was slowly chipping away at. So, at 27, with close to $10,000 in credit card debt, a car payment, and living paycheck to paycheck, I thought, 'How can I afford to add a new expense?' The only light at the end of the tunnel was that my car would finally be paid off in October, right around November's due date. Also, I had insurance. But even with those things, I still couldn't see how we could afford it. I imagined I would have to stop paying off my credit cards and let everything go into collections.

The only other mother I knew who was around my age was my friend Robin, who said it really wasn't that bad! Since she was in a similar financial situation as me, she gave me hope that we could really make it work without breaking the bank.I calmed down and relaxed, knowing we would find a way. I made affirmations, reminding myself that the universe has never screwed me over before. I always find a way. I've never truly struggled. I've never been homeless. I have family. I have Spencer. People poorer than me with less support have babies all the time. We could do it!

I tried not to over-think and over-analyze anything, but since I'm the type to plan the crap out of any situation (when I was younger, I would go so far as to write 'scripts' when I was about to make a phone call to someone I didn't know well!), I ended up thinking about our situation a lot. I thought about 'worst case scenarios' and what I would do if I really did find myself in a difficult situation. This was actually helpful, once I quit panicking. I realized I had insurance, so my medical bills wouldn't cost too much. And if, for some reason, I lost my benefits, I could apply for state paid medical (I later found out you can use both insurance AND DSHS medical if your income qualifies.) I knew a lot of other unmarried mothers on state benefits and I was willing to go that route, should I need to. And once I started paying my medical bills, I realized almost all of them would be willing to work out payment plans, if I wasn't able to pay in full.

I was also lucky that I had short term disability benefits. Once I went on leave, I would receive 55% of my average check until (6?) weeks after my baby's birth. Even with that, I was still worried about paying my credit card bills. I decided I could get help from Spencer or my mom if I needed it. And if they couldn't help, I would just have to fall behind. It made me sweat just imagining anything of mine going into collections. But I eventually came to terms with that worst case scenario as well. I knew tons of people who had unpaid bills fall into collections. They eventually recovered. It was a lot of work, but if it had to be done, I could do it. Nothing was more important than my baby, not even my (already failing) credit score.

Once my pregnancy progressed, and the bills began to grow, it turned out to be much smoother than I had imagined. While I was still working and making money, we were able to pay off most of our pregnancy bills as they came. $50 here, $140 there, $200 there. With Spencer paying half, it wasn't too bad. My insurance covered a lot. I didn't end up losing my benefits. We didn't need food stamps. We did end up applying for WIC, which was helpful.

Once I started working less and less, I ran into a few tough spots and borrowed (can I call it 'borrowing' if I haven't paid it back?) from my mom a time or two, and Spencer helped me pay the bills that I couldn't. Our medical bills did end up piling up, especially once November was born ('surprise, I'm three weeks early, no time to save up after daddy bought a car that very night!) And we did end up letting them go past due. In retrospect, I should have called immediately and made payment plans. The only reason I didn't was because I was planning on us paying the bills off with our tax returns, since her birth was so close to the end of the year. Our tax returns did end up coming in a little later than I had hoped, and a couple bills did get sent to collections, but in the end our returns came, and we payed off all our pregnancy bills. The new baby tax credit amounts were just enough to cover those remaining bills, about $1500. So, basically, November paid for herself!

Our total out of pocket cost: about $2000.

My current financial situation: It feels so good to have all of our pregnancy/birth bills paid off! It felt like a huge weight was lifted off my shoulders. And I have been trying to get better in all other financial aspects of my life as well. I've quit piling on added debt to my credit cards, so I can actually pay them down. I recently paid off one of my credit cards completely! My minimum payment for that card was $25. Instead if enjoying that newly freed $25 as an additional much-desired spending money, I'm going to add it to the $25 minimum monthly payment of my next lowest balance credit card, bringing the payment up to $50. Once that one is paid off, I'm going to take that $50 and again add it to my NEXT lowest balance, and so on. I've been wanting to try this 'snowballing' of debt payment for years, and now I finally can! I made my first 'snowballed' payment a few days ago, and boy does it feel good! And according to my approximate calculations, I should be debt free in about three years with this method! Awesome!

So can you afford to have a baby? I would never encourage anyone in an unstable situation, or someone who just isn't ready, to have a baby. But if you dearly want a baby, or you find yourself with a treasured surprise, you can do it. There are ways. Reach out to family for emotional support. Contact your local DSHS for state benefits, if you really need financial help. Make a budget and start cutting back on unnecessary expenses. Start a gift registry with the things you need help with. Search craigslist and ebay and local consignment shops for inexpensive baby finds. Don't forget (like me) to contact your billing specialists and ask about payment plans, if you aren't able to pay a bill in full. Don't fully rely on DSHS, WIC, gifts, and an anticipated tax return to pay for everything, just know they are there if you need them. Try your best, relax, and enjoy that baby. Everything will work out. Remind yourself that!

{If you have a question or idea for an upcoming Ask a Mommy, contact me or leave a comment!}

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