19 Sep Financially Preparing for a New Family Member
Deciding to bring a new baby into the family is an exciting time! However, we all know how expensive children can be. In fact, the average middle-class family will spend $165,000 raising one child until they are 18 years of age. That’s definitely not pocket change, so it’s important that your family is financially prepared before bringing a new family member home. Here are a few tips for preparing for a new baby.
1. Look into your health insurance coverage.
Your first expenses will, of course, be doctor’s visits and hospital delivery bills. Make sure you’ve looked into your health insurance and are aware of how much of each doctor’s visit it will cover. Research your birth options as well–not everyone wants to choose a hospital birth, however, not all insurance companies will cover home births.
2. Plan for parental leave.
Not all companies offer paid parental leave, and many companies won’t offer much (if any) paternity leave. So it’s important to plan ahead to know who will be off when, and if your family will need to make up for any lost income during that time. Try to limit your spending while trying to conceive so that you have plenty saved up during your leave.
3. Set a budget for baby gear.
If this will be your first child, there’s a lot of gear that you’re going to have to budget for: clothes, diapers, crib or bassinet, and more. Determine everything you’re going to need to buy before the baby comes. Research what items you can purchase used in order to save a bit of money, or what items you can settle for a cheaper option on.
4. Think long-term.
Where do you plan on having your child(ren) go to school? Do you plan on starting a college fund or 529 plan for them to help get them through college? Think long-term about expenses and plans and set up an emergency fund just in case. Look into getting a life insurance policy on you and your spouse–you’ll have someone else relying on the two of you now.
5. Prepare for the unknown.
Having a baby is one of the most expensive things you’ll do in your entire life. With the prenatal doctor’s visits for you, pediatric visits for your child, clothes, diapers, and other necessities, you’ll spend hundreds of thousands of dollars. But children are unpredictable and you never know what else you’ll need to prepare for. A broken arm during the clumsy toddler years? A NICU stay?
Simply put: your lifestyle is going to change, and you’ll need to put an emphasis on saving. But we all know how darling those little angels are, so of course they’re worth every penny!