Smart financial moves to prepare you for the Baby
Category : Pregnancy
As you come towards the end of your pregnancy journey, which was coupled with a lot of hurdles that you have successfully leapt through, one thing becomes certain; you are finally going to be a mother. At that moment, you and your partner start to prepare for the baby.
Preparing for parenthood isn’t all about baby clothes and ultrasound photos since a lot of financial preparation are required. Making smart financial moves to prepare you for the baby will ensure that your little bundle gets all the things that she will need.
USDA estimates that averagely, middle-income parents will spend $14500 yearly when a new baby arrives. Apart from food and clothing that usually take up a big chunk of that amount, diapers may cost you between $30 and $90 per month; you will cough out around $2000 just to fit out a nursery. Let me not break down all the budget since having a baby is not a financial decision, although it will affect your finances.
Therefore, in order to enjoy your new-born, getting on top of your finances ahead of time should be a top priority. Here is how you can do that.
- Review your health insurance
Due to the huge costs of medical care associated with pregnancy and childbirth, paying for these costs out of your pocket may leave you financially overwhelmed. Since childbirth and maternity care are essential health benefits, you can, therefore, look for a health plan that covers these benefits.
For vaginal delivery, the average cost is usually around $10,000 while a caesarian delivery with complication may cost you around $23,000 that is according to the US Agency for Healthcare Research. Reviewing your pregnancy and childbirth coverage before your baby arrives to make sure that your paediatrician and the hospital you will deliver in are covered so that you pay less for your delivery.
- Pay off your credit card debt
Since being a parent comes with responsibilities that will always frown at your wallet, having a credit card debt that comes with some interest fees will make parenting to be a lot harder than it should be. Therefore, from the moment you realise that you are expecting a baby; you should spend the next eight months to knock out some of your debts, if not all. This is because once the baby arrives; it will be difficult to find that extra money to pay off the debt.
- Get yourself a life insurance
Life insurance policies are usually affordable and offer you coverage for a set period of time. A smart parent should always ensure that they are ahead of whatever storms that life may be brewing for you. If you are having a baby, you have to consider all possibilities in life. Ask yourself this question, what if something happens to you? Will your child be able to face this world without you?
By taking a life insurance, you will still be able to provide for your child even upon your death. Although chances of you dying are relatively small, in life, anything can happen. For as little as $200 a year if you are a non-smoking adult, you may get a 20-year policy that is worth somewhere around $250,000.
- Create a budget
Diapers baby formulas and clothes should not even get you financially worried. Daycare and school tuition which will come later down the line are what should motivate you to start saving. Creating a realistic budget will enable you to find ways on how you can trim some budget fat while at the same time you will be able to deal with the added costs.
You should also consider the impact of your maternity leave on your income. Once your maternity leave expires, you and partner will have extra bills to cover in the name of child care expenses which may cost you around $800 or more.
Since Mother Nature is kind to give you nine months to prepare for the DS(Dear Son) or DD, once you have created your budget and analysed it, you can start setting aside some money to cover all the expenses that you expect to have.
You should also avoid overspending on your baby stuff by prioritising on your baby’s must-haves and avoiding baby items that will be a waste of money. You can also open education savings account for your baby since it is a smart financial move that only smart parents make.
What are the benefits of putting your wallet in order before the baby arrives
- Less stressful parenting
If the latest surveys by the American Psychological Association are anything to go by, around 70% of those who participate always list money as the number one stress factor. Therefore, if you want to live to attend your child’s graduation day, you should always ensure that you eliminate stress causing factors from your life. Putting in order your finances is one of the ways you can do that.
- More financially stable kids
Research shows that children who grow up in a family with a culture of financial accountability have greater chances of ending up to be financially stable adults. Furthermore, how will you teach your child about financial literacy if you can’t lead by example? Therefore, you can build the foundation for your child’s financial stability by making smart financial moves even before he or she comes into the world.
- Better marriage relationship
Financial woes can also take its toll on your marriage or relationships. You may find yourselves pointing fingers at each other when maybe your mortgage is in foreclosure, or you have missed out on the deadline to settle your credit card bills.
To summarise, parenthood comes with new sets of financial responsibilities that if you don’t make early preparations, you may end up suffering from postpartum depression. Therefore, the earlier you start crunching those figures to see how much you should set aside, the better off you and your baby will be. If you have a partner, saving will be much easier since you will combine your efforts.
Author Bio: I am Kristi and have 3 charming babies. I love to share my experience through Intelligentmother.com. There are lots of solutions for pregnant women inside my blog. Thank you for reading!