Babies can be a great source of joy for you, family and friends. While babies are adorable, they are also pricey. Parenting.com says that raising one child costs $12,000 a year. Before and after the birth of your child, there are questions you should be able to answer about your finances before committing to having a child.
Before Birth
Look at Costs Overall
According to US News, hospital costs alone for women giving birth without maternal or obstetric risks ranged from $1,189 to $11,986. Consider what you or your spouse might need to compromise before the birth of your child. Having a financial plan, or talking to a financial advisor, is not a bad idea. You will want to create a budget with your child in mind, even if you do not plan on having your child until later in the year.
Save Money for a Rainy Day
Now is the time to either start an emergency fund, or add to it. Three to six months of living expenses should be saved. Some children have sensitive immune systems, which could cause them to fall ill. This is an especially important thing to think about. Also, something could happen to you or your spouse that causes you to fall under a single income or unemployment. Start saving now for any emergency situation that could arise.
Think About Child Care
Think about who can watch your baby while you or your significant other is at work. While you might have a few weeks to decide during maternity/paternity leave, you could get caught up taking care of your child and make a clear decision. Good child care facilities have waiting lists so start planning early.
You can also ask your employer to work from home once or twice a week to cut down on child care costs. Finding the right child care can take a few months, so consider figuring out your child care needs a few months before your baby is born.
Find a Pediatrician in Your Insurance Network
Your child’s first doctor’s visit will come within the first week of birth. Consider talking with family and friends to determine if they know of any good pediatricians. You can also use sites like ZocDoc to find one that fits your plan and policy. Call the office before you visit to double check that the pediatrician is in network, so you don’t get hit with any out-of-network copays.
After Birth
Start an Education Fund
Although college is 18 years away, it’s never too early to start saving. Saving your money now may even help your child with his or her masters or doctorate. Start with a 529 savings plan that anyone can commit to. You can deposit financial contributions from baby showers or first birthdays into these accounts.
Create or Adjust Your Will
If you do not already have a will, create one within the first few months of your child being born. If you already have a will, ensure that you have a guardian listed, so it’s clear who can take care of your child should something happen to you and/or your significant other.
Keep Putting Money Into Your Retirement Accounts
You should also continue to contribute to your retirement accounts. Although you may need to cut back a little in order to afford other expenses, it’s still important to save for your future as well.
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