Strategies for Getting Money
Stripped of their emotions (which is, admittedly, hard to do), the economics of pregnancy are like the economics of everyday life. Quite simply, you need to make more money than you spend. If you are not able to do this—and many new parents are not—you need to find ways to cover the shortfall. There are a variety of methods you can use to help.
Use the Resources You Have
As mentioned earlier, many fathers-to-be and fathers take second jobs to build their savings or pay off bills. You may have paid vacation leave from your job that represents a sort of time savings bank that you can dip into as the need arises.
Do you own your home? You may be able to take out a second mortgage or a home equity line of credit that will supply you with cash. This cash can buy you or your wife time with baby. Be careful, though—your home is your greatest financial asset, now and in the future. When you establish a line of credit or a second mortgage you are, in effect, selling a long-term asset for short-term reasons. You may decide that the trade-off is worth it if your partner has her heart set on staying at home with the baby for an extended amount of time.
Be “risk averse” during the pregnancy. Do not make any big spending or investment decisions. You have enough things on your mind as it is. After the baby comes and you get settled into this new life, then you can review your overall financial picture and see what needs to be done to improve it.
Another possibility is to sell something of value, such as one of your classic cars gathering dust in the garage or your baseball card collection languishing in a shoebox. A resource like this, if you are willing to part with it, is another way to produce extra cash until your partner goes back to work and finances are on a more even keel.
Borrowing or Receiving Money as a Gift
Your parents or your wife's parents may be able to help you financially and may even offer to help without you asking. They know the financial pressures you're under because they themselves faced similar pressures when they were new parents. They've come to a point in their lives where they are better able to help their children and grandchildren, and will probably be happy to do so.
If they cannot afford to give you money, they may be willing to front you a short-term loan. This is better than borrowing money from a bank, getting a cash advance on your credit card, or taking out a home equity line of credit, all loans you must pay back with interest. Even if your parents charge you interest, it will be nothing like the terms a bank will demand. Also, your family is not going to take your house away or put a lien on your paycheck if you have trouble paying the money back on time.
Pride may stop you from asking for or accepting money from your parents or relatives. You also may not want them to get tangled up in your financial affairs, and they may put strings on their gift or loan. As always, you will need to weigh the cost of receiving this money against the advantages that come from taking it.
Credit Card Debt
It is going to be difficult to get ahead financially if you carry exorbitant credit card debt. The more debt you incur, the bigger the hole you are digging for yourself. Paying that interest fee to the bank every month to service that debt is like throwing money away or adding more dirt in the hole that you must ultimately dig out.
If you owe $8,000 on a credit card that charges 18 percent interest, and you pay the minimum payment due of $160 each month, you will be free of this debt in ninety-four months—nearly eight years. The total interest charges you pay will be close to $6,900. Raising your monthly payment to $250, however, will erase the debt in forty-four months and cost you about $3,000 in interest.
New parents generally understand this, but again, the emotions come into play. Your partner's dream may be to have the perfect little nursery. In her mind, this requires a total makeover of the baby's room: new crib, new furniture, new paint job, new everything. You don't have the money to pay for it, so you pull out the plastic.
One thing you can do, if you have to go this route, is shop around among the credit card companies for one with lower interest rates than what you pay now. Some cards offer better deals than others, and the difference can save you money. As always, you need to be careful. If the economy is going through a rough patch and your job status is shaky (or you're unemployed), don't put yourself out on a limb by taking on too much debt.