How to Prepare Financially for a Baby
Congratulations! Finding out you’re going to be a parent is one of the most exciting times of your life. And to make sure you can cherish the moment your baby is born and best provide for them without the burden of financial stress, we’ve put together a list of tips that’ll put your family in a great financial position before and during your little one’s first months.
Preparing for the Pregnancy Financially
Once you’ve found out you’re going to have a baby, you should immediately start preparing your finances for the large cost that will accompany the time before your child is born. These tips can help you make a budget and long-term financial plan for your growing family.
Estimate the cost of healthcare. Get in touch with your insurance company and try to get a ballpark estimate of what your healthcare bills will be. Figuring out how much you’ll owe out-of-pocket for copays, premiums and deductibles isn’t easy, nor is it an exact science. Costs can vary wildly depending on where you live. Try talking to a relative or close friend that’s comfortable sharing what their pregnancy costs were. They can give you a more realistic estimate of what you’ll be paying.
You can also keep coverage costs lower by getting your healthcare in your insurance company’s network. Save your family from post-delivery work and stress by selecting an in-network pediatrician for your new baby at this point, too. And if you’re not sure if your health insurance is adequate or don’t know how to get health insurance in the first place, we’re happy to help.
Start saving now. If you already have an emergency fund, great! But now that you’ll have at least one extra member in your family, it’s a good idea to increase the amount you’re putting in that fund each paycheck. It’s never too early to start saving for a college fund, too. Aside from putting money away in specific accounts, start thinking about how you can save money in your daily life — cooking more at home, skipping the trip to the coffee shop by making your own at home and spending less on minor luxuries like new clothes and shoes are great ways to keep a little extra money in your account.
Money Planning for Post-Delivery
Before your baby is born, make sure your home is prepped and ready to handle a new addition. Take these tips into consideration to make sure you get everything you need without overspending.
Look for used baby gear. The list of things you’ll need once your baby arrives is tremendously long: onesies, socks, a crib, bassinet, bottles — the list goes on and on. And if you were to try and buy everything new and in line with the latest trends, you’d be spending more than necessary. Instead, keep an eye out for sales and get in touch with your friends and family who don’t use their baby gear anymore. Your bank account will thank you for it.
Calculate your time off from work. When your little one is born, you won’t want to rush straight back to work the next day. Start calculating how much paid time off you’ll be able to take from your job, and get a little more frugal with your sick and vacation time. Talk to your employer about maternity and/or paternity leave to see what kinds of benefits are built in to your employment. And if you’ve exhausted your PTO, vacation and sick time, ask your boss about the Family and Medical Leave Act (FMLA), which protects your job status should you take an extended period of unpaid time off.
Plan for child care. It’s a well-known fact that child care is out-of-this-world expensive, and there’s little you can do to get around it. If grandma and grandpa are nearby and retired, sure, you can save some money by having them watch your child a couple times a week. But you can save yourself some stress and money for those other days of the week by researching, calling and visiting local child care facilities and comparing their costs. A little research will help you save some money and a lot of stress in the long run.
Add your child to your health insurance plan. Depending on your insurance, you’ll usually have 30 or 60 days to add your child to your plan without a lapse in coverage. A new baby will be making quite a few doctor’s visits for checkups, so getting them on your plan to mitigate the cost is crucial.
Consider life insurance. After you’ve added a child to your family, it’s a great idea to re-evaluate your insurance coverages. If the unexpected were to happen, you want to make sure your spouse and children will be able to cover expenses and move forward without a source of income. Parents can also choose to add a life insurance policy for their new addition to the family. Life insurance provides stability in the event of the unfortunate and provides unmatched financial peace of mind for both parents and children.
Taking these tips into consideration will help you save money that can be utilized in emergencies, for education and other things later on in life. The better prepared you are for your bundle of joy financially, the more you can focus on giving them as much love as possible.
Have any questions about life insurance or any other insurance coverages? Connect with an American Family Insurance agent today and ask away — they’re always happy to help.