Being an adult comes with many responsibilities. You have to pay bills, make ends meet, and when it finally comes down to it – provide for your family. But starting a family of your own does not just mean baby clothes and diapers alone. It also means that you need to be prepared financially.
Let’s break down some of the most important aspects of financial planning for expecting parents. It involves securing health insurance, estimating medical costs, budgeting for the baby, and much more to name a few.
Although some parenting skills can be learned on the go, such ad changing diapers and knowing when to feed the baby, while a few tasks need to be done before the little one’s arrival. Preparing a list of things to be done once the baby arrives will be a smart move, as you might not have a lot of time on hand to think once the baby is here. Here are a few things that you might need to list out and prepare for:
Secure Health Insurance
Having a baby can be costly, even for those who hold health insurance cards. For you not to be overwhelmed by these costs, anticipate them as early as this phase. Make sure that you understand how your health insurance works and what it can cover medical bills including prenatal care, labor, delivery, and all other costs that may follow after.
Plan Maternity or Paternity Leave
It’s important to know how much time you and your significant other will allot to your leave, as they will determine the household’s expenses in the days to come after the delivery of the newborn. Always study company policies about this type of leave to get a clear view of what to expect on the outcome of your finances.
Construct a Pre-Baby Budget Draft
Once all of the medical costs are identified and have been allocated with a budget for, anticipate and understand how the family’s income will be affected in the coming days after delivery. You can make a “shopping list” for your baby’s needs and adjust the budget as necessary.
Baby products are costly, so it is always better to set limits on both necessities and optional buys. Always weigh your options (classic baby buggy versus LCD controlled stroller). You can also consider buying used items if you want to stick to a strict budget.
Plan Post-Delivery Budget
Recurring costs will change the household budget for years to come. Plan for things like diapers and extra food so that you know how that expense would look like in the long run.
Choose a Healthcare Provider Covered by Health Insurance
During the first few weeks of his life, your child will need numerous appointments with a pediatrician. You will have to think of how to pay or afford this. You can get a trusted pediatrician by asking your colleagues and family members for their recommendations. You may also call local clinics and interview a doctor before making any choice. Just double-check if the healthcare provider is covered by your insurance. You may do so by asking the clinic or directly calling the insurance company to identify out-of-network fees.
Add Child to Health Insurance Dependents
Normally, a leeway period of 30 days from the baby’s delivery will be given to parents to add the child to an existing health insurance policy. For some plans, it can take up to 60 days.
But it’s important to do it as soon as you can, so that in emergency cases wherein the baby gets sick, he is covered by insurance. This way, your little one’s health is the only thing you would have to be concerned about, and not be worrying about the money.
Start an Emergency Fund
Having a new addition to the family is the perfect time to anticipate emergencies and start a “Rainy Day” fund. Kids are prone to accidents and injuries, so it would always be great to have an extra pool of money ready for emergencies. Start with at least three to six months’ worth of living expenses to cover these emergencies and keep them funded for as long as you can.
Save for Child’s Future
Yes, your baby just arrived and you have several years to start worrying about college and tuition fees. But the fact is, it’s cost-effective and easy to save for your child’s future, if you start from the time of their birth, if not before.
This would help you spend all your time with your little one, without worrying about saving for his/her future.