Preparing for parenthood is absolutely life changing. Your expectations, values, and priorities can shift pretty quickly. But while bringing in a bundle of joy into your life can be exciting, the things a parent like you should prepare can surely make your head spin. From going to your regular checkups, scheduling childbirth classes, to setting up a baby’s room, everything can be overwhelming.
Pregnancy may come with a roller coaster of emotions, which is why most parents focus on preparing emotionally. However, real parents recommend getting your finances in order before having your first child. We’ve highlighted the best suggestions below.
Secure a steady source of income
Finding a stable job can be pretty challenging, but it’s one thing you should secure when you’re planning to have a baby soon. Search for ones that provide more protection to their employees. If you’re currently employed, check if your paycheck is reliable and consistent, and if the company is in good financial shape. In case you’re taking on freelance jobs, finding a permanent or full-time position might be worth considering. This will allow you to secure paid leaves, health benefits, and even retirement plans.
Have a stable housing situation
Having a stable housing situation is necessary to ensure you have enough space for the new member of your family. If you’re opting to buy a home, it’s always best to shop around to have a clearer idea about the best layouts for families and current house prices. For instance, you can attend home tour events such as the Northern Wasatch Parade of Homes to see the latest home building designs. Going to such event is even more beneficial if you’re planning to build your own custom home before having your baby.
On the other hand, if you’re thinking to continue renting in the meantime, you can try negotiating for a lower rent when renewing your lease. If you and your partner have a good track record, the landlord might be able to consider your request. You can get ask your neighbors about renewal negotiations or deals they were offered before.
Establish a new baby fund
As much as we just want to enjoy having a new baby, it also means paying for numerous expenses up front. To avoid relying on more debts or loans, start building your new baby fund. This short-term saving should cover all newborn baby care expenses. Besides the medical costs, you’d also want to save for supplies, gear, and furniture, including car seat, bedding and crib, baby monitor, stroller, bathing and diapering supplies, toys, newborn wardrobe, and feeding supplies.
The total amount you should save for may also depend on the type of insurance you have, or if you have one in the first place. Generally, you can expect to add about $10,000. Review your policy to have a better idea of how much you’re likely to pay out-of-pocket.
Set up a college fund
This might seem too early for you, but considering the cost of going to college nowadays, you’d definitely want to start saving now. In fact, according to surveys, the average cost for college tuition and fees is around $40,000 and up, depending if it’s an in-state or out-of-state school. SO, the earlier you start saving the more likely you can afford it.
In building a college fund, you can consider starting a 529 college savings plan wherein you can grow your money tax-free. Another account you can open is the Coverdell Educational Savings Account which has a yearly contribution limit of $2,000 a year. Open an account that suits you and your partner’s incomes and savings goal.
Check your health insurance
Depending on where you live, delivering a baby can still come with a huge hospital bill even with an uncomplicated pregnancy and health insurance. That’s why it’s important to do your cost forecast beforehand. Talk to your health insurance carrier and revisit your coverage. Most health plans will cover preventive care services (like screening tests to vaccinations), prescription medication, laboratory services, and other maternity or newborn care expenses.
Moreover, you can also opt to add your newborn to your health insurance once you gave birth. You just need to inform your insurance provider and provide documents such as social security number and birth certificate. Or, you can look for a new health plan with better coverage for you and your baby.
Not being prepared financially for your first kid might not totally spoil the excitement of such a new chapter in your life. However, it can cause a lot of headaches along the way. After all, every parent wants to give the best life for their kids. Secure their future and yours, and make things much easier later by making these financial moves.