How to Prepare for a Baby Financially

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As a parent to be, you must be wondering how to financially prepare for a baby? There are several ways to go about doing this. Here are the things you need to consider and put into place before your baby arrives.

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How to Prepare for a Baby Financially

There are a number of things you need to do as soon as you start thinking about having a baby.

Here are some of the top ones.

1. What to do if You Don’t Have Insurance

When you are considering how to financially prepare for a baby with no medical insurance, it is very important to learn how to make a baby budget. 

Planning for costs such as hospital bills, formula, and diapers should be included in your monthly expenses. 

Do the research to determine what the average costs are for all the things you will need for your baby.

Plan on buying some items used such as a crib or changing table, or ask a friend or relative for theirs if they don’t plan on having more children.

You’ll want to cut the costs of having a baby as much as possible.

Talk to your doctor and hospital about a payment plan for medical expenses.

If your income is on the lower side, see if you qualify for assistance. Most hospitals have a plan you can apply to that will pay for part or all of your medical bills.

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2. Get Insurance Before You Become Pregnant

If you don’t have insurance try to get covered before you start trying for a baby.

Be sure that the insurance covers pregnancy and childbirth.

You’ll also want to make sure that it covers both from the day the policy is signed.

If you are planning on purchasing coverage for your infant through your employer, discuss plans with your human resources department. 

You should find out if your insurance provider offers flexible spending accounts so that you can put some of this money toward your unexpected costs.

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3. Create Your Baby Budget

Take the time to create a baby budget.

This is much simpler than it may sound. 

First, you should gather up all of your financial information and then write down everything.

Include personal loans and student loans, as well as the mortgage payment, automobile loan, and the savings and investments you have accumulated. 

Be sure to save a summary of your income as well, just in case you need to refer back to it at a later time.

Then add in all of the monthly expenses you expect once your baby is born.

Find out how much of the hospital and doctor bills you will have to pay after insurance.

You will need to set up a savings account for the one-time costs of having a baby.

Then you will need to see how the monthly costs of a baby fit into your current budget.

If you find you can’t afford them, it is time to start cutting back on non-essential expenses.

Finally, Goggle what college costs are expected to be when your baby turns 18. 

That will give you an idea of how much you will need to save and invest in their college education.

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4.  Saving for the Baby

Consider starting to save for the baby’s expenses from the moment you decide to have a baby or at the very least the moment you find out you are expecting. 

Your savings should be enough to cover all the expenses during your maternity leave. 

Having a specific amount in your savings account will make things easier when it comes to making those necessary financial decisions. 

For example, you may put off buying a new car if you already have one and have enough savings to see the baby through birth and beyond.

Also, be sure to ask your employer about paid leave. They may offer a couple of weeks or even a month. Or they may not offer any, so you’ll have to consider how you will pay your bills while you’re not working.

5.Taking Advantage of Other Savings Opportunities

There are other items you can buy or sign up for that will help you save money. 

For example, some companies and financial institutions give new parents a cash gift for having a baby. 

Some may even entice new parents with free items like diapers or other baby essentials so they can earn the gift. 

It may take some time and research to identify these companies or financial institutions, but it is worth the effort as you may end up saving quite a bit of money.

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6. Reviewing Your Insurance Coverage

Before you go into labor, you will need to make sure that your insurance plans cover such expenses. 

Review your insurance policy and make any necessary changes to ensure you are covered throughout your pregnancy and through childbirth.

Choose a pediatrician within your insurance network and research the cost of things like pediatricians, hospitals, medical equipment, and supplies. 

By doing this you will be able to get a good idea of how much you will need to save for these expenses. 

Another financial consideration you need to make is where you will have the baby. 

While this is often planned from day one, you need to make sure that the hospital you select to have your baby at is also within your network.

This way, you don’t need to worry about the expenses later on.

7. Saving for the Baby’s Future

The best way to prepare financially is to start saving early. 

Even if you do not have a lot to save, you can get started by setting up a small savings account that you can regularly continue adding money to. 

You never know what may happen down the road, so it is always best to be prepared and have some savings.

The most important thing is that you take action now rather than later. 

8. Top off Your Emergency Fund

If you have an emergency fund, add a little extra to it. 

Kids come with surprises. From a broken arm to a midnight visit to the hospital due to an illness, you never know when you’ll need some extra cash.

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9. Pay Off Your Debt

If you have the cash, now is the time to pay off any high-interest debt you may have. This can include credit cards or personal loans.

The less debt you have the more room you will have in your budget to cover all the expenses that come with having a baby.

10. Make a Plan to Pay For Your Child’s College Education

Make a plan with your partner on how and when to save for the baby’s future college education. 

There’s no time like the present to start. 

Even a couple of hundred dollars a month into a high-yield investment account will go a long way to paying for your child’s education once they reach 18 years of age.

Be sure to talk to a licensed financial planner to determine the best options for your situation.

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To Sum it All Up:

There are a number of ways you can prepare yourself financially for a baby. The key is to start planning early and to take action. Be sure you understand all the costs involved in the birth and then once your baby comes home. Make a budget around these costs and find ways to start saving money. Then once your baby is home you can spend your time loving the new addition to the family instead of worrying about how you will cover all the costs.

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