Having a baby involves a lot of financial planning. Here are some of the financial undertakings you can expect to tackle during pregnancy, the moment you become parents, and the years after.
Understand your health insurance and anticipate costs
Having a baby is expensive, even when you have health insurance. However, you should be able to forecast your expected costs fairly early on in your pregnancy. Ensure you choose an obstetrics doctor, pediatrician, and hospital within your insurance network for all your prenatal and postnatal care.
Plan for maternity/paternity leave
Make sure you understand your company’s policies and the state’s laws to get an accurate picture of how your maternity leave will affect your bottom line.
Keep your pre-baby spending under control
You’ll have a long shopping list for your baby, so set a limit on both necessary and optional buys. Look for the most rewarding baby registry options in your area. Purchase items when they are on sale even if you may not use them right away. If a family member or close friend is having a baby shower in your honor, direct everyone to your registry, which can include diapers and wipes.
Post-baby budgeting
Once the baby arrives there will be items you need to buy that you may not have thought you’d need. On the other hand, there will be items that you don’t need. Make sure you keep your receipts so you can make exchanges. Plan for the additional costs of having a baby such as diapers, food, and childcare.
Top up the emergency fund now
Having at least three-to six-months of living expenses in the bank is a comfortable place to be when you have children as there’s no telling what unexpected costs may occur.
Birth certificate and social security card
While at the hospital the staff may provide you with the necessary paperwork and some hospitals even go ahead and file it for you. Often you’ll be asked a bunch of questions only hours after you’ve delivered so have the essentials written down, such as your partner’s date of birth and the spelling of the baby’s name, because if you’re on your own at that time and exhaustion kicks in you’ll be thankful for the back up.
Add your baby to your health insurance
Hand this task over to your partner, but make sure they do it sooner rather than later.
Keep funding your retirement
When a baby arrives it’s easy to forget your long-term financial goals, but don’t lose sight of the end goal and stay on top of your retirement plans.
College fund
College is costly now so imagine what it’s going to be like once your baby is old enough to attend. You can make it more manageable by starting to save now. Ask your financial planner about college savings accounts.
Our best advice is to prioritize your spending and make sure you have plenty of savings in the bank for a rainy day. Plan for your future now so that you can relax and enjoy your baby.