So you have decided to have a baby! While it is common and normal to be excited about the future bundle of joy; many parents-to-be often forget to fully weigh and calculate the actual cost that comes with having a baby. We know that there are a lot of expenses to consider and deciding to bring a child into the world maybe a decision that takes a lot more planning than expected. Here are just 7 of those expenses you should prepare for.
Finance Baby Tip #1: Planning For Maternity/Paternity Leave
This will possibly be the first and most important financial situation you will need to consider and plan. Due to different rules and policies of various companies and areas, it is imperative that you know before hand your options when it comes to taking parental leave so that you can plan accordingly. This is an extremely important factor to consider as any maternity/paternity leave will affect your budget and income for about a year. Knowing whether or not you will be paid on leave and how much, will help budget for the time off. This will help minimize any possibility of money matters being encountered which elevates some of your stress.
Finance Baby Tip #2: Draft A Pre Baby Budget (Well In Advance)
This is an important step to do. Planning what your budget will need to be once the baby arrives, again will be helpful in reducing stress. Do not wait till the last minute before making a budget, this is an easy pitfall that many parents early on can avoid. As in any budget preparations this can take a fair amount of time to construct…
When setting out your budget try to think of any and all possible expenses there will be. If you are a first time parent, there maybe some expenses that you may forget to factor in. Its crucial to lean on friends and family that have been here before. Believe me take all the help that you can get! Ask for tips about unexpected expenses, they had to cover when they had their baby. The main goal is to help you be more prepared, which equals to a more pleasant experience.
Finance Baby Tip #3: Babies Medical Expenses Prior To Delivery
Even if you have medical insurance, it is important to anticipate your medical costs, as well as any costs that you might have to cover out of your own pocket. This should include the medical bills before and after your babies delivery.
Prior to delivery expenses include prenatal care as well as the delivery and any possible in-hospital stay for the few days after delivery. In some cases expenses can range from $10,000 to $20,000 if you are not properly insured! The first thing to do is examine your insurance benefits and learn your options. See what bills and how many of it will be covered and make plans for any bills not included which you may have to pay yourself. Make sure to plan for all costs of the prenatal care, as this may include many appointments, tests, scans and more.
Finance Baby Tip #4: Babies Medical Expenses Post delivery
You will also need to plan not only the delivery itself, but also any post delivery hospital stay. It will need forethought, as you may need to make allowances for any unexpected complications and the resulting extra hospital stay. Find out how many days post delivery hospital stays your insurance covers, and any extra days you may have to pay for yourself.
When it comes to medical expenses for a baby, the list is seemingly endless. Doctor visit are necessary and frequent within a babies first few weeks of life. Then there are further check-ups; immunity shots; as well as any unexpected emergencies that will require medical attention. Of course mom’s own follow ups and health adds to the cost as well. With all this in mind, you need to choose a pediatrician you will use before he/she is born. Make sure to do your research on this point as, your child early beginnings is dependent on this. Plus depending on medical coverage and charges you may have some limitations and options.
Finance Baby Tip #5: Decide On Who Will Take Care Of The Baby And Budget Accordingly
This point connects back to my first point about figuring out paternity leave in how and what it pays. Employers offer moms to be up to six to eight weeks of paid maternity leave. Some employers even offer men two weeks of paternity leave, to also bond with their new child. If needed their is a federal law that allows 12 weeks of unpaid job protection leave for certain employees through FMLA (Family Medical Leave Act), for most family reasons and health.
Once all these options are exhausted you need to figure out who than will care for your young child. What will be your options? If you are a couple will one of you quit your job to be a stay-at-home mom/dad. This will mean cutting down the family income to one instead of a combination of two. If you do not have a partner, you will need to research and set out a plan of action to generate extra income while at home if you have to. Like starting blog lol, I laugh but I am serious. It can great time while you are home taking care of your baby.
Childcare/Daycare can be very costly. I was fortunate enough to have my child’s mom watch over my daughter when she was really young. We still ended up having to put her through daycare when she was about three. We were paying about $700 a month and that I hear is on the cheaper end! Again, this is something you should take time to research and do your homework. There is a cost associated here on your baby/child that has nothing to do with money. This is where your child will be spending a considerable amount of time, while you are away at work. You must make sure their early exposure to other people and kids are positive ones!
Finance Baby Tip #6: Buying All Needed Baby Accessories
With the endless amount of baby products available on the market, it maybe easy to overspend on items you don’t really need. Research and make a list of the essentials and purchase those first to avoid falling short on important items.
Take advantage of hand-me-down clothing and second hand baby toys from friends and family. There is no shame in accepting items that are no longer being used and your bank balance will thank you. Don’t shy away from stores like Goodwill and Savers for baby’s furniture. You would be surprise on the things you find that are practically new and sometimes unused.
I can’t tell you how many unworn clothes or toys my child just didn’t get around to use. We definitely gave away many things from the excitement of having a baby and not tempering the urge to buy everything to make our baby comfortable. Most of what you end up buying is really not necessary.
Finance Baby Tip #7: Saving For Your Child’s Future Education
Right now might seem too early to be considering your child’s education costs, however, these costs are something that can’t be taken lightly. You need to plan early if your child is to attend college, as relying on a student loan could be crippling to your future young adult. I am not a big advocate of using banks for savings, as the returns are just none existent. It does provide storage for your money and different vehicles to keep yourself from even accessing before its usefulness.
Another option is setting up a college fund or 529 plan which invest in the market. This options certainly does better than saving in a bank or most CDs, but I would definitely do your research. 529 plans are subject to market risk and may have high management fee and other charges. Normally there are also limitations on how much you can contribute and if penalties if do use it early or on anything that is not college related.
If you plan or want your baby to go to college start researching and saving now for education. You will definitely thank yourself in the future and I am sure your child will too.
Keep in mind
Deciding to bring a child into the world is a great responsibility, and as such, something that you need to plan well and be sure that you can adequately meet all the needs a baby requires. Many parents may fail in properly planning a baby’s arrival and further care, which may create a type of “helter-skelter” environment in the first few weeks/months and add unnecessary stress that overshadows what should be an event that brings a time of joy.
If you didn’t get the undertone the message, I will summarize by the old adage “Failing to plan is planning to fail.” So to alleviate and already stressful period be prepared.
