Financing Your Family Planning

By Jennifer Adams, CFP, Aspire Wealth Management and speaker at RESOLVE New England’s upcoming 20th Annual Fertility Treatment, Donor Choices, and Adoption Conference on Nov. 2, 2013

Whether you are thinking of IVF, egg donation, adoption or egg/embryo preservation, the costs associated with any of them can be overwhelming.  How much will it cost? Can I afford it?

Before you make any financial decisions, it’s best to know all the facts.  The first thing everyone should do is determine how much they spend on a monthly basis.  Not just on the basics, but on everything.  It’s always a good idea to get a good picture of where your money goes so you can determine if you can cut-back expenses or if you need to come up with additional income.   This process will take time, but it’s a very important first step.  You will continually use these numbers down the line when you bring your child home and need to fit in the next set of family expenses!

Step 1: Gather all credit card and bank statements and make a category for every expense; put the expenses in the categories and tally them up for the month using an excel spreadsheet or a good, old-fashion calculator(go back at least  3 months).  Get in the habit of doing this each month to find out where you spend your money.

Once you have all of your expenses categorized, check your bank statements and tally all of your payroll deposits into your bank account for each month.  Subtract your total monthly expenses from this income total to find out how ahead or behind you are each month.

Step 2: Add all of your payroll deposits for the month and subtract your monthly expenses from Step 1.  If you have money left over, you should be putting this into savings on a monthly basis.  If you are short, we need to go back to the expenses and make some changes to your monthly spending.

If you have money left over each month, go online and open a separate checking or savings account at your bank specifically for this money and label it “Family Planning Account”.  Each time your payroll is deposited into your account, set up a recurring, corresponding debit that takes your extra money and moves it to this “Family Planning Account”.  For example, if you have $300 left over each month and you get paid 2x a month, the first paycheck of the month should have a $150 debit that goes out to your “Family Planning Account”.  The second paycheck of the month should have another $150 debit that goes to this “Family Planning Account”.  This captures the extra money so you don’t have a chance to spend it!

Step 3: If you have money left over each month, open a separate checking or savings account at your bank to deposit the funds and label it “Family Planning Account”.  Redirect these extra funds automatically each month into this account so you don’t spend them!  *If you don’t have extra funds each month, skip this Step and go to Step 4.

If you don’t have money left over each month, this is where your work done in Step 1 comes in handy.  Find out what expenses, if any, you can cut-back.  Can you reduce your cell phone bill by switching plans? Can you take your lunch to work instead of buying lunch? Can you make coffee at home instead of buying Starbucks?  Can you cut back on the ATM (if you’ve got cash, do you spend it)?  Can you sell your car for a cheaper, used car that will lower a monthly payment and lower your car insurance bill at the same time?  Take a hard look at your expenses and make a commitment to give something up.  Remember, it doesn’t have to be forever!

Step 4: Take a hard look at your expenses and pick 3 things that you can give up or reduce.  How much extra money will it yield each month?

If you can’t reduce any expenses, can you take on a second job temporarily to come up with extra money?  Can you work extra hours at your current job?

While all of these Steps require a bit of pain, they are so important for you to complete so you have all the information you need to make the right decision for you and your family.  The results will be worth it!

Check out my article in the autumn newsletter about specific ways to finance your family planning.  In the meantime, start tracking those expenses!

This blog entry is not intended to provide financial or legal advice.  You should discuss issues relating to financial planning with your own accountant, financial planner and attorney.

This blog was published originally last summer.

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