this is Article – Commodity Reproduced with permission from NerdWallet.
The arrival of a new baby is stressful. For the first few weeks, your waking hours are a cycle of feeding, changing diapers and searching on Google “is it normal for baby to (fill in the blank)”?
Mobilizing the energy — and attention — for other routine tasks like showering and paying bills can seem like a daunting task. You’ll be lucky to remember today, not to mention when your next credit card payment is due.
Do your sleep-deprived future person a favor and start preparing your money early in the pregnancy so things can run on autopilot for some time after the baby is born.
If you don’t have a budget yet, start there, says Cecilia Williams, mom, certified financial planner and chief operating officer at Halbert Hargrove, a financial planning firm.
“Identify all of your current income and expenses so that you and your partner have a clear understanding of where your money is going each month,” says Williams. “You’ll definitely need to adjust as your due date approaches, so getting a starting point is priority #1.”
Then make a plan to manage the other costs, big and small, associated with having a baby.
1. Find the cost of giving birth to your baby
The cost of childbirth is high. The average delivery cost can range from $10,000 to $20,000, depending on where you live. Even with insurance, new parents can expect to shell out several thousand dollars for maternity care.
Call your insurance company or the hospital where you plan to give birth for more specific numbers. Then dive into your health coverage to understand your coinsurance, deductible, maximum, and coverage limits.
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And other major insurance companies have tools you can use to get estimates of total costs and out-of-pocket costs, based on your plan. Use these numbers to set a realistic savings goal to cover.
Do you have access to a Flexible Spending Account? If the schedule allows, set your entitlements to tax-free progressive provision on hospital bills. When your hospital bills start arriving, you can pay directly from your FSA or use a rewards credit card and request a refund.
See also: 25 million children at risk of serious but preventable diseases amid sharp drop in vaccinations
2. Plan ahead for your parental leave
Paid parental leave is not guaranteed at all. In fact, only 11 states and Washington, D.C. have paid leave laws, some of which won’t take effect for several years. And only 25% of employers offer some form of paid time off, according to a 2019 survey of employer health benefits by the KFF, a nonpartisan healthcare think tank formerly known as the Kaiser Family Foundation.
If you have paid time off through your employer, ask questions early. Find out how many weeks are covered and what percentage of your salary. Should You Use Leave and Sick Leave First?
You also want to know when and how your benefits will be paid, especially if they will come from multiple sources. Believe me, you don’t want to be a week after giving birth emailing your benefits provider to sort through the logistics of your vacation payments.
If you don’t have access to paid time off or plan to take unpaid overtime, practice living on a low income whenever possible. This will help you identify optional expenses to reduce or eliminate and help you build a savings pillow before your baby is born.
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3. Start ‘paying’ for childcare
Childcare is the biggest monthly expense for most new parents. Get off to a good start by “paying for” nursery well before your baby arrives.
Put the money into a separate savings account — ideally an interest-paying account — weekly or monthly. This helps you adjust to new expenses and allows you to pay childcare expenses for a few months which you can utilize to cover initial costs such as deposits and application fees.
We seeChildcare costs rise as parents prepare to return to the office
Not sure how much childcare will cost in your area? Check with your local friend group or parent group to get an idea of the cost of childcare, a nanny, or other arrangements.
You can also get other baby essentials, like nappies, formula, and wet wipes, into your budget now, with an educated guess. It doesn’t have to be perfect. You can adjust it on the go.
4. Automate billing and credit card payments
Set all recurring bills for automatic payment, ideally from an account or credit card. If you can, go a step further and set up this card for automatic payment as well.
It was one of the best things her family did before welcoming their first child, says Carly Campbell, a blogger and stay-at-home mom of two.
“All the various bills were processed without our active attention,” she says. “We only had to check the bank account once a month to make sure there was enough to pay a lump sum.”
Kelsey Sheehy writes for NerdWallet. Email: email@example.com. Twitter: @KelseyLSheehy.