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Having a baby is one of the most exciting periods of expecting parents’ lives, but it can also be one of the most stressful. A new baby brings a heap of financial responsibility, which means some serious planning is in order before delivery.
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Figure out Health Insurance Costs First
The cost of raising a child is only growing; the latest figures from the U.S. Department of Agriculture reveal that a baby born in 2015 will cost its parents approximately $12,980 a year and up to $107,400 between the ages of 1 and 17, which means college isn’t included. Parents in the upper-middle-class can expect to spend as much as $233,610 over their newborn’s first 17 years of life. Don’t get too panicked by the numbers; while having a baby does cost a pretty penny in 2018, there are some premeditated steps you can take to ensure that your growing family gets off to a prosperous start.
Get Yourself out of Debt
Here is an easy-to-follow walkthrough that will cover all the major points of financially preparing for a new baby. The hospital is the last place you want an unexpected surprise. As soon as you find out you’re pregnant, call up your health insurance provider and figure out exactly how much prenatal care and delivery costs they’ll cover. This will put you one-step ahead of the game by allowing you to budget for any out-of-pocket expenses and additional fees months in advance.While it might not be feasible to pay off all your backlogged expenses in nine months, it doesn’t hurt to start cleaning your financial slate. If you have thousands in credit card debt just sitting around accruing interest, pay off as much as you can in the first trimester of pregnancy to spare yourself hundreds of dollars in needless fees.
Consider Your Housing Situation
You may decide that a permanent residence is a good idea with a baby on the way. Apart from settling down and decorating a house for your child to grow up in, a home mortgage can be a wise financial choice for couples who have been saving for a while and are ready to make a solid financial investment. Home ownership allows you to build equity, which is a valuable asset for growing families later on. Mortgages are also tax-deductible, so you could wind up gaining a new house and saving thousands through the years.
Budget for Time Off
Learn your company’s maternity and/or paternity allowances way ahead of time. Think about whether you can you use paid vacation days during your leave. Or are you going to have to cut corners and save up to support yourself during the first months of your baby’s life? Paid maternity leave is not mandatory in the United States, so you’ll have to speak with your employer and learn exactly what kind of coverage or benefits you’re eligible for during your leave.
Start Saving as Soon as Possible
Even if it’s just $50 as soon as you find out you’re expecting, it makes a difference. Money shouldn’t govern your happiness, but financial security is a large factor in a family’s wellbeing. Take a financial planning class online with your significant other and learn to be open and communicate about money now.Cutting back on frivolous spending is difficult, but if you do so early on and keep your child’s future in mind, the process becomes much easier.