I Always Tell New Parents the Same 3 Things About Planning a Pregnancy

Parenthood is beautiful, but having a baby is a very costly endeavor that needs to

  • Parenthood is beautiful, but having a baby is a very costly endeavor that needs to be prepared for.
  • Creating a baby budget will go a long way for all the costs you’ll need to cover as a parent.
  • You also need to create a parental leave plan and think about how to deal with massive medical bills.
  • Read more from Personal Finance Insider.

Becoming a parent is both a life milestone and weighty financial decision. Raising a child isn’t cheap — the average cost was around $287,000 over 18 years

There are many financial implications to think through, from taking time off work, budgeting for childcare, and saving for long-term goals like college. Prepping for a child can be an extra financial burden on women, who often have to navigate unique factors like maternity leave and medical care. 

And that’s not even getting into the disproportionate burden women face when it comes to raising children: Women often shoulder a majority of childcare and housework, often on top of their full-time jobs, according to a Pew Research survey. 

As a certified financial planner, I help individuals and families make the most of their money and plan ahead for their financial future — and becoming a mother is a large part of that. Here are the three things I always say about financially planning for a pregnancy. 

1. Any plan is better than no plan

It’s easy to get overwhelmed with the laundry list of items to buy and actions to take when preparing for a new baby. But having a financial plan in place — even a basic one — will give you peace of mind and help you feel more prepared to raise a child. 

I advise women to try to start planning as early as possible. First, take stock of your current financial picture, including reviewing your cash flow. If you have a partner, this is a great time to sit down with them and talk through your plan. 

It can be exhausting, and sometimes even painful, to face down your spending habits. That said, knowing where everything is coming from and going can help you make a game plan for your growing family. 

Next, draft a “baby budget.” Brainstorm any future recurring child care costs like diapers, day care, and baby clothes and record them down in a spreadsheet along with your other necessary monthly expenses like rent or mortgage, utilities, and groceries. Once you have an idea of your new monthly costs once the baby comes, you can budget accordingly. 

Your family is expanding, but that doesn’t mean you should run out and buy a bigger home or car. These expenses, especially when combined with baby-raising costs, put an added strain on your budget. The same goes for all those trendy baby items — your child will likely outgrow most of them. Consider purchasing second hand items whenever possible. 

2. Have a parental leave plan in place

Review your company’s parental leave package to learn how much time your employer allows you to take off to care for your child.

Unfortunately, many companies don’t offer this benefit: Fewer than one in five parents get access to paid family leave, according to the Kaiser Family Foundation.

The United States is one of the only developed countries that doesn’t have a federal paid family leave policy — but they do have a law that provides unpaid leave. Called The Family and Medical Leave Act, eligible parents are allowed up to 12 weeks unpaid leave. Some states offer their own paid leave programs, so be sure to check out your state’s policies. 

If your job doesn’t offer paid family leave, you may want to consider buying short-term disability insurance, which covers a portion of your income while you’re out of work caring for your new baby.

You can ask your employer if they offer short-term disability, or buy your own private plan. Most policies only last a few months — if you plan to take more time off, consider long-term disability insurance. 

3. Avoid a massive medical bill 

We’ve all seen the horror stories of new parents being hit with an eye-popping medical bill after leaving the hospital. The last thing you want is to be dealing with insurance claims in your first few weeks with your new baby. 

As a child-bearing woman, it’s essential to review your health insurance policy to confirm what’s covered and not covered when it comes to giving birth.

One of the perks of a nine-month pregnancy is that you have some time to review everything — so make sure you confirm the hospital you plan to give birth at is in-network, as are all the doctors you plan to work with.

Most newborns will need to have their first check up within a few weeks, so finding a pediatrician that’s in-network before your bundle of joy comes will save you a headache down the road. 

If you have a high-deductible health plan, consider putting in the maximum contribution to your Health Savings Account. Contributions to an HSA are tax-deductible and can be used for medical expenses, including childbirth. 

If you don’t have health insurance, I would highly recommend getting coverage (the average out-of-pocket medical cost of childbirth ranges from around $3,300 to $5,100). Pregnancy qualifies you for special enrollment, meaning you can either buy a health insurance plan or switch to your partner’s plan. It’s best to do this as soon as possible. 

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