Nothing is as exciting as the arrival of a new baby. However, it can also be overwhelming, especially concerning finances.
A new baby may mean enormous expenses for you as a parent. This fantastic life experience requires you to reflect on your financial stature in preparation for the arrival of the newest member of your family.
Planning ahead before your bundle of joy arrives is an excellent way to ensure a seamless transition and obtain financial confidence. Here are a few financial aspects you’ll need to consider as you budget for your new bundle of joy.
In This Article
1. Maternity Costs
Expecting a baby needs a great deal of financial discipline. Before the baby comes, there will be expenses associated with the pregnancy, such as medical tests, regular maternity checkups, and medicines. Then there are the actual delivery and hospital costs that you’ll need to take care of.
Much like medical and hospital bills, maternity costs have gone over the roof. A simple delivery could cost you thousands, especially in private hospitals. And exceptional cases like surrogacy could be much more expensive. Preparing for gestational surrogacy is a significant investment, from finding the best-qualified surrogate mother to acquiring surrogate-friendly insurance.
You must, therefore, plan ahead for the baby’s expenses before delivery to avoid financial disarray. The first thing you’ll need to do is get maternity insurance to cater to the expenses. If you have health insurance, check whether it covers maternity costs. Moreover, you could acquire maternity coverage and add it to your present insurance by paying a high premium.
You could acquire standalone maternity insurance too, particularly if you’re preparing for gestational surrogacy. Nevertheless, it’s not advisable to depend on insurance alone. Start saving as early as possible.
2. Life And Disability Insurance
No one ever wants to think about the probability of unexpectedly getting into a severe accident or taking on an illness that threatens their lives. But when you have a child that depends on your wages, you’d be heedless if you don’t ensure that they’re sheltered from the worst.
Luckily, if you’re a young and healthy parent, you can acquire a life insurance policy without going bankrupt. Yet you’ll need more security. For most employees, it’s a great idea to take disability insurance coverage, except if your employer provides a significant benefit as part of your remuneration. If you encounter any severe illness or injury that stops you from working, your new baby and family will be financially safe.
3. Health Insurance
Year one of parenting requires consistent trips to the pediatrician for checkups. Dealing with just one serious illness or accident could empty your savings account when you don’t have health insurance. Critically evaluate your insurance policy options if you don’t already have one, or you could consider a higher premium and add your bay to the policy.
It’d help to add your child to your employer’s insurance plan. If you’re a couple, it’ll depend on who has a better insurance policy. It could be even cheaper to take a cover under one parent’s insurance policy plan than both. If possible, try doing a bit of math to determine whether a smaller deductible policy plan will work.
4. Child Care Funds
Paying someone to take care of your child or baby is one of the most significant expenditures you’ll have to make when you return to work. Childcare is a massive variable when budgeting for your new baby. If one parent stays home to care for the baby, the better.
The first year could go a little easier on you than the ongoing years if you’re paid off work. You can even qualify for tax relief, which could significantly help counterbalance your childcare expenses. Nonetheless, remember that these expenses differ substantially from state to state.
5. Emergency Savings
Regardless of how budget-savvy you are, it’s impracticable to foresee every new expenditure or unanticipated cost that’ll sneak up when the baby arrives. For example, you may need additional childcare services when you have a weekend function, work late in the evenings, make extra trips to the hospital, or land in the Emergency Room in the middle of the night. Also, you could incur extra costs when breastfeeding isn’t working and you have to buy formula.
Setting away money for unanticipated events and unexpected bills will prevent you from borrowing money from friends and family or taking a loan, a position you’d never want to be in. Set aside seven to nine months or even up to a year of living costs in a different account.
Be mindful of the fact that starting from somewhere is beneficial. Begin saving little amounts for your new family by creating automatic transfers to the savings account.
Conclusion
Children are amazing gifts but bringing them up is undoubtedly expensive. But if you prepare early, welcoming your bundle of joy doesn’t need to break the bank. Health insurance can shield you from most hospital bills, yet budgeting and planning will take care of everything.
The new baby will bring enormous happiness; nevertheless, it brings loads of responsibilities too. Therefore, to avoid financial constraints, you must plan early and make realistic evaluations of your and your partner’s financial state.
