Financial Prep Steps for Your New Baby

May-Blog-2-1024x683If you’re having a baby this Spring, the list of things to do prepare for the arrival can be daunting. Here are some financial steps you should consider before your baby arrives.

Calculate Your Medical Costs

Medical costs for having a baby are expensive and they vary from city to city, and hospital to hospital. If you have health insurance, it’s important to find out what your coverage entails; including co-pays, coinsurance, and deductibles. To determine exactly what you’ll pay out-of-pocket versus what is covered, you need to contact your medical providers and health insurance company. It’s hard work, but if you don’t tackle it before the baby arrives, it may get harder.

Budget for the Baby’s Needs

Strollers, diaper bags, clothes, formula, crib, toys, and baby room preparations are just some of the many expenses you’ll need to plan for before baby even arrives. Your income will take a big hit when baby comes, so it’s important to make a budget. If you’ve figured out what your medical costs will be, the next step is to make a list of the other expenses. Then figure out how much you can comfortably spend each month on supplies and acquire the products you’ll need over your 40 weeks of pregnancy. Try to avoid overspending on all the fancy gadgets you’ll undoubtedly find. Stick to the necessities (and your budget) to help save money.

Select the Right Fit Doctor Based on Comfort and Price

You should choose a doctor you’re comfortable with. Start by asking for recommendations from friends or family in your area. You’ll also want to make sure your doctor is in your provider network to avoid any out-of-network charges. Verify by calling your insurance company. Once you have a few names, make some interview appointments with pediatricians to help you decide.

Keep an Emergency Fund

Kids are accident prone, so it’s a good idea to be prepared for emergencies. Consider saving at least three to six months’ salary in the bank to cover unexpected incidents. How do you build an emergency fund? Here are a few tips:

  • Set a savings goal each month to get you into the habit. Try setting up an automatic payment to your savings account when you get paid to make it easier.
  • Reassess your budget and cut some expenses by eating out less or carpooling to save on gas. Reallocate the money you save to your emergency fund.
  • Spring is tax season. If you get a return, consider putting the money into an emergency fund, instead of spending it.

Review Your Company’s Maternity & Paternity Leave

You should certainly take time off work to spend with your new baby, but before he or she is born, make sure to check your company’s policies on maternity and paternity leave. Also, consider your state’s laws. It’s important to find out how much time you can legally take, and if you’ll be paid while you’re away, as a change in income will impact your household finances.

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