Expecting a baby can be exciting and overwhelming at the same time. It can also be expensive, are you prepared for the costs? It’s important to take time now to think about and plan for how your financial life will change once your baby arrives. Here are some of the costs associated with having a child to help you plan and prepare for you new arrival.
Medical Costs
Throughout your pregnancy you will have expenses related to health care including doctors visits, medical tests, and ultrasounds. Additionally, you will have expenses related to the birth of your child. Learn what costs you will be responsible for so that you can plan for them now!
Even when you have health insurance, the cost of prenatal care and maternity care varies significantly. If you have insurance, it is important to understand what your policy covers. Take some time to review your health insurance plan and learn what the plans premium, co-pay, co-insurance, and deductible amounts are. If you do not have health insurance, see if you are eligible for state health insurance (Medicaid).
Maternity/Paternity Leave
The amount of time you and your partner have off of work, and if you will be paid during this time can significantly impact your finances. Plan for you and your partners time off of work. Determine if you will be paid while you are on leave. If not, how will the bills be paid while you are off of work? Are you able to save enough to cover your bills before you have your baby?
One-time Expenses
If this is your first baby, you are probably starting from scratch and will need a lot of baby gear. Babies need a lot of stuff from diapers to car seats. To help you get the gear you want and need, set up a baby registry with items at every price point. Not only will you get what you want, but friend and family will be able to help you. Additionally, look for gently used items at local thrift stores or on-line marketplaces.
Child Care
If you and your partner both plan on continuing to work after your baby is born, you will need child care. It is best to start looking for a child care provider now as there may be a waiting list. You may also want to check with your employer to see if you can use a Flexible Savings Account (FSA) to pay for child care using pre-tax income.
Create a Baby Budget
Take some time now to create a budget that includes recurring child costs such as diapers, child care, and extra food. This will help you plan for these expenses. If your budget cannot afford these expenses, determine what changes can be made so that you can meet these expenses. If you aren’t sure what to change, track your spending for a month and review how you are using your money. Determine if there are any expenses you can cut back on or eliminate. Remember there are things you need, such as electricity and food, and things you want. Making sure you can afford the needs should be the priority with any budget.
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