Moms-to-be: Take these 4 financial steps before your baby arrives
- Four money moves to make before your baby arrives.
- Start preparing your finances early in your pregnancy.
- If you don’t already have a budget, this should be the starting point.
The arrival of a new baby consumes everything. In the first few weeks, her waking hours are a cycle of feeding, diapering, and Googling “Is it normal for a baby to (fill in the blank)?” Mustering up the energy — and attention span — for routine tasks like showering and paying bills can seem like a tall order. You’ll be lucky enough to remember what day it is, let alone when your next credit card payment is due.
Do your sleep-deprived future self a favor and start preparing your finances early in your pregnancy so things can run on autopilot for a while after the baby is born. If you don’t already have a budget, start there, says Cecilia Williams, mother, certified financial planner and COO of Halbert Hargrove, a financial planning firm.
What to do before your baby arrives?
“Outline all your current income and expenses so you and your partner have a solid understanding of where your money goes each month,” Hargrove says. “This will absolutely need to be adjusted as you get closer to your due date, so having a starting point is priority No. 1.» Then make a plan to manage the other costs, big and small, that come with having a baby, advised the AP.
RESEARCH THE COST OF DELIVERING YOUR CHILD. The price of childbirth is high. The average cost of delivery can range from $10,000 to $20,000, depending on where you live. Even with insurance, new parents can expect to pay several thousand dollars out of pocket for maternity care. Contact your insurer or the hospital where you plan to give birth for more specific numbers. Then, dive deeper into your health care coverage to understand your coinsurance, deductible, coverage maximums and limits. Anthem, United Healthcare, and other major insurers have tools you can use to get estimates of total and out-of-pocket costs, depending on your plan. Use these numbers to set a realistic savings goal to cover them.
Plan ahead for the baby’s arrival
PLAN AHEAD FOR PARENTAL LEAVE. Paid parental leave is far from guaranteed. In fact, only 11 states and Washington, DC have paid leave laws, some of which won’t go into effect for several years. And only 25% of employers offer some form of paid leave, according to a 2019 survey of employer health benefits by KFF, the nonpartisan health care think tank formerly known as the Kaiser Family Foundation.
If you have paid leave through your employer, ask questions ahead of time. Find out how many weeks are covered and at what percentage of your salary. Do you need to use vacation and sick leave first? You also want to know when and how your benefits will be paid, especially if they come from multiple sources. Trust me, you don’t want to spend a week postpartum emailing your benefits provider to unravel the logistics of your leave payments. Filed Under: baby arrival budget.
Get ahead of child care
START “PAYING” FOR CHILD CARE. Child care is the largest monthly expense for most new parents. Get off to a good start by “paying for” child care long before your baby arrives. Put the money into a separate savings account, ideally one that earns interest, each week or month. This helps you adjust to new spending and allows you to bank a few months of child care costs that you can leverage for start-up costs like deposits and application fees.
Not sure how much child care costs in your area? Ask around your local group of friends or parenting group to get an idea of what it costs for child care, a babysitter or other arrangements. You can also budget for other baby essentials like diapers, formula and wipes now by making an educated guess. It doesn’t need to be perfect; it can be adjusted on the way. Filed Under: baby arrival budget.
Save as much time as possible
AUTOMATE INVOICES AND CREDIT CARD PAYMENTS. Set up any recurring bill for automatic payment, ideally from an account or credit card. If you can, go a step further and set that card up for autopay too.
Carly Campbell, a blogger and stay-at-home mom of two, says this was one of the best things her family did before welcoming their first child. “All the various bills were resolved without our active attention,” she says. “We only had to check the bank account once a month to make sure there was enough for the lump sum payment.” Filed Under: baby arrival budget.