There are a lot of aspects of being a first-time parent that you simply cannot be prepared for. No matter how much you read or how much advice you get from friends and family, you don’t know what you are in for.
One thing that you should be prepared for is how much it will cost to have a baby. There is no secret that it is expensive and you need to have your financial ducks in a row before giving birth.
There are quite a few expenses that go beyond just shopping for baby.
In this article, I will go over some of the ways you can be financially prepared for when you have a baby.
Talk to a professional
Though some basics should be adhered to when it comes to being financially prepared, every situation is unique.
Some things make your situation different and only talking to a professional can address those things.
A professional can take a look at your current finances and give you a roadmap customized to your specifics.
Understand your insurance
The very first thing to understand is how much the actual birth is going to cost you.
You likely have insurance through your job and maybe facing a deductible. Figure out exactly how much your out of pocket expenses will be with your insurance.
Ask a ton of questions with your insurance provider as there are sometimes some hidden fees that you may be expected to pay.
Things like a doctor helping out during the delivery that is out of network can add thousands to your bill even if you have no deductible.
Plan for a reduced income
One of you will be out of work for some time when the baby arrives. You may have a good maternity leave package, but many people don’t.
You’ll be looking at a reduction in your income with one of you out of work. Make sure you save as much as possible beforehand and come up with a new budget.
That means cutting some unnecessary expenses. Go through all of your outgoings and determine what can be cut. High cable bill?
Get rid of it as you won’t have much time to watch TV anyway afterward. There are many other items that you can certainly live without for a year or so.
Save for college
There are several different types of schemes to set money aside for college that will only set you back a little amount of money per month.
By doing this now, it can save you loads of money when the time comes for your child to go to college.
You may even save some money on your taxes by putting this money in specialized accounts or funds.
A 529 Plan is one such account in which the growth of the account is never taxed as long as it is used on higher education.