The cost and responsibilities that come with the new baby are quite intimidating for the new parents and soon-to-be parents. Money, indeed is a huge stress factor but to tell you the truth, there is never a ‘perfect time’ for having a baby. If you just wait for that elusive time, you may never have a baby. Here are some suggestions that will prove fruitful in managing the financial issues related to baby care and to prepare you for a happy parenthood.
List all the financial priorities
Make a list of the goals that you want to achieve before the baby arrives. You and your partner must think alike to enjoy a comfortable pregnancy and a great parenthood. Prepare a list of all the expenses, going to incur with the arrival of the baby. Communication is of paramount importance during this time. So, discuss with your partner in case you want to extend or prune down the list.
Start saving
Many new parents want to stay home for the first few months after the birth of the baby. In this case, you must start saving from now to recover from the financial hit that you will get as there will be no source of income. You need to spend a lot of money on diapers and baby food. Most of the people take a three months off which also means that you won’t get paid for three months. So, make an emergency fund and start saving in it from now on.
Increase your Life Insurance
Parents must have life insurance policies, adequate enough to support the new member in the event of a tragedy. Always remember that both the parents require a life insurance policy. For a woman, it is always better to have a life insurance policy before pregnancy because later she might suffer from some pregnancy related illness and having a life insurance coverage will be a big support.
Explore employer benefits
This is a good time to check out what is and is not covered by your employer during and after the birth. If both the parents are working, one can take the advantage of one-plus-one option. It will be a much cheaper option than the family insurance policy. Also, check when the open enrollment takes place. If it is in the second or third trimester, then it is always a good idea to sign up for a child care FSA.
Inform your Boss
You must inform your boss about the pregnancy, sometime in the second trimester. Don’t expect lots of congratulations as your boss will be thinking about the effects that your pregnancy will have in your workplace and on the projects, if any. You can however ensure a smooth relationship with your employer by offering to train the replacement candidate.
Get ready for out-of-pocket costs
This is the time to check with your health insurance provider to see how much of the pregnancy and delivery cost will be covered by insurance. There are many insurance plans that co-pays the substantial, out-of-pocket expenses. It is a good idea to check with your insurance agent whether your plan covers ancillary expenses like doula fees, apart from the mainstream expenses associated with cesarean section and epidural anesthesia.
Start a new savings account
Many women host baby showers early in the third trimester and expectant mothers usually find that gifts are not actually needed during that period. You may ask for financial gifts that will be used to fund the new savings account. You can directly tell them that you have opened a new savings account for the baby and the money accumulated in that savings account will take care of the future expenses.
Don’t look for a bigger house now
Many parents start looking for a new house as a ‘nest’ for the new baby. This is a big mistake. There is no need to over think and overbuy. Finding a new place and then moving, can create a lot of unnecessary stress. It would be better if you wait until the baby comes and then assess your living situation. Ideally, you may need a bigger house only when the child has at least attained 3 years of age. Till then you can always stay the way you have been staying all the while and use the money for bearing other expenses related to baby care.
Create a will
It is a good idea for the new parents to create a ‘will’, stating who the child’s guardian will be. You can finish this paperwork before the actual childbirth. There is no point in keeping aside this work as once the baby comes, you will get busy with the new job.
