The birth of your child is an extremely exciting time, but it comes with a variety of different costs. By preparing your finances ahead of time, you’ll have a smoother transition into parenthood.
Learn About Your Health Insurance
Even with health insurance, having a baby is expensive. Try to determine your costs early in the pregnancy. Remember, the sooner the better. Make sure you take all medical bills into consideration. These include prenatal care, the delivery itself, and other expenses during the first few months of the child’s life.
Determine Your Maternity and Paternity Leave
How much time you and your partner receive in leave from work and whether or not you still receive payment will strongly impact your family’s finances. Don’t be afraid to ask your workplace’s HR department questions about their policies to ensure that you fully understand them. Also look into your state’s parental leave policies.
Create a Budget
After you determine your medical costs and any income cutbacks, you’ll be able to create a budget for the time before the baby is born. Babies bring a variety of expenses, which can add up very quickly. Create a budget, and then a shopping list. Make sure you stick to it!
You’ll also need to develop a post-delivery budget. With the birth of a baby, your household’s expenses will be permanently increased. By planning for recurring costs such as diapers, formula, and childcare before your baby’s arrival, you’ll have one less task to stress you out once they’re born.
Ensure You Have an Emergency Fund
An emergency fund is always important, and even more so if you have children. Kids are especially accident-prone, and you don’t want to be caught off guard by an expensive accident. You should aim to have three to six months’ worth of living expenses in your emergency account.
Add the Baby to Your Health Insurance
After the arrival of your new addition, you normally have thirty days to add him or her to your health insurance plan. Although some plans allow you to wait up to sixty days, it’s still better to add them sooner rather than later. Should something happen, you don’t want to be stuck without health coverage for your new child.
Having a baby will permanently change your finances in addition to your family. There are several steps you can take ahead of time to ensure that the transition is a good one.
