Once you find out you’re pregnant, it’s time to re-evaluate your finances. As a couple, you probably already have a budget, including monthly expenses, retirement, and free money. However, those figures can change once your baby is born. There are a lot of hidden expenses you might not think about until you have to pay for them. The best way to offset sticker shock is to create a new financial plan.
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There are many ways the stress of parenting affects people, and financially is certainly no exception. Even with insurance, having a baby is expensive. In fact, the average cost of giving birth can run into the thousands, and that’s for an uncomplicated delivery. In addition, you also need to think about after-care visits, deductibles, exams, and urgent care visits. Try to set aside a little extra each month to ensure you’re not dipping into savings to cover medical costs.
You also need to factor childcare into your budget. Even if you plan on taking an extended leave of absence, you’ll still need to fund a reliable babysitter. If you work with an agency, you’ll have the assurance that your sitter is vetted properly. However, that does come at an additional cost. Once you return to work, you’ll then need to pay for daycare. Depending on where you live and the hours you need help, this can easily add another $1000 or more to your monthly expenses.
If you have a substantial amount of outstanding debt, now’s the time to pay it off, or at least decrease how much you pay each month. If you have outstanding credit card debt, try paying them off using the snowball method. Choose the card with the smallest balance and pay it off in full. Then, you can move on to the next card and pay extra until that one is paid off. If you’re still paying on student loans, you could refinance them. Having Earnest student loan refinancing options offer those individuals with good to excellent credit and whose loans are in good standing. Once approved, you’ll pay less interest each month and possibly be able to pay your loans off faster.
Unless your employer pays 100 percent, you’re probably paying out-of-pocket for healthcare. Now that your family is expanding, you need to re-evaluate the cost and see if there’s a more affordable option. Since having a baby is a qualifying event, you may be eligible to change your policy or sign up for a different one. You can also use any saved money to invest in a health savings plan, which can be tax-deductible.
Avoid Large Purchases
Unless you’re already in the process of doing so, avoid buying a home or a new car. There’s really no rush since most new parents will keep their baby in their bedroom for at least three to four months. And unless your car is a two-seater, you can hold off on buying a larger family car for now as well. It’s better to wait at least six months after your baby is born to determine if you can comfortably afford it.
Following these suggestions should put you on good terms to financially plan for your baby.
Featured Photo by Kelly Sikkema on Unsplash