Are you adding a child to your family? Congrats! Whether it be through birth or adoption, parenthood is very fulfilling for many people.
As with any significant life change, if you have a better grasp of the financial requirements and tasks, you can be better prepared for what's ahead.
Plan things one step at a time. Ask relevant questions, such as:
Will you (or your partner) take parental leave?
Though the United States does not offer universal paid parental leave, many employers offer some kind of maternity leave and may include some portion of it as paid time off. The Family and Medical Leave Act allows eligible employees to take up to 12 weeks of unpaid leave after the birth of a baby. Talk with your boss and your HR department to see what you can arrange. Don't forget to explore options for paternity leave, as well. If no paternity leave is officially available, talk with your partner. You may still be able to save vacation time or other paid time off.
Do you have or need healthcare coverage?
Health insurance is a big-ticket item. Hopefully, you're fortunate enough to be covered under either a group policy, like one through your employer or partner's employer, or through the Affordable Care Act (check out www.healthcare.gov for details). If these options aren't currently available to you, you could apply for a private policy.
The state of Virginia also offers a program known as FAMIS, which is health insurance for children and pregnant mothers. Women, Infants, and Children (WIC) is another program that assists mothers and children in other types of resources and education, sometimes including health benefits.
Will you plan on a hospital, birthing center, or professionally-assisted home birth?
Be sure to include the financial aspect of your research. Does your health insurance cover a specific method and not others? Are your doctors and other prenatal professionals covered under your insurance plan? These kinds of questions are very important. Meet with the birthing professionals or institutions beforehand to clarify billing procedures and to make as many arrangements as possible before the baby gets here.
Have you considered supplemental insurance?
Supplemental Insurance companies like Aflac and MetLife, offer a variety of insurance plans for prenatal, maternity, and neonatal care. "Supplemental" means just that-- the care is not comprehensive coverage for a mother and child. Plans usually cover one or the other, during pregnancy or after. It is meant to be used alongside your regular health care coverage at different phases. Be sure to ask a lot of questions to ensure that you get the coverage that addresses your deepest concerns.
Always ask the same questions of your primary insurance company before signing up for anything additional. But when in effect, supplemental policies can provide tremendous benefits, which usually cover gaps in your main healthcare policies.
Please note: Some providers require that you wait as much as a year before trying to have a baby. So, if it's on your radar in the near future, start asking questions now.
Are there existing medical or other conditions for the mother or child which will require special treatment?
While most people can't know this answer for sure, it is something to consider. For example, if you plan to adopt a child with special care requirements, or if the mother has special medical circumstances, take a look at those extra costs and budget them in as best you can.
Will you use formula or nurse?
How you will feed your baby is a factor to consider in the planning stages. There are pros and cons, no matter how you choose. Babies can go through a lot of formula the first year, and at $20-plus per can, it doesn't take long to add up.
If you choose to breastfeed, you may want to consider getting a breast pump to help you collect milk while you are away. Most pumps are a couple of hundred dollars, but they are worth the investment, and many insurance policies and programs now offer a benefit toward this type of equipment.
Who will care for your child?
Childcare is one of the biggest expenses that you will have as a parent. Many couples can rearrange their schedule in a way that they can provide care for the child without an outside party. If this is not an option for you, you will need to consider a family member, friend, private babysitter, or daycare. Again there are pros and cons, no matter how you choose. If you pay, there can be tax deductions to offset it.
If you're a single parent, or need assistance either finding care or covering the cost, check with your local Social Services Department. They offer programs to help families in this area. Keep in mind that in a non-COVID-19 environment, many childcare providers have a waitlist. So, this is another area that you won't want to wait until the last minute to learn more about.
How much will you plan on spending on your child per month for the first year?
Most of the remaining things that you will need will fall into this area. Will you use cloth diapers or disposable? Are you able to have a baby registry that your friends and family can support?
While it is essential to buy some things new for safety reasons (car seats and strollers, for example), many other expenses can be reduced by buying things secondhand—or even borrowing them! Baby clothes, toys, diaper bags, and other necessities can break the bank if you're not careful. Take a good look at your budget and see what you can reasonably afford.
Once you have a plan in place, it's time to get ready. Take a look at your (written) budget. Talk with your partner and decide where to make adjustments to accommodate your new child's expenses.
If possible, start setting aside the amount you plan to spend on your child each month and put it in a separate account. If one partner plans to stay at home after the baby is born, ease your way into living on one income and set the rest aside in the baby account, too. This way, you can make the financial shift before your child arrives, and you have some extra money put away for unexpected (or expected) expenses. If things are too tight, talk with your partner and decide where you can adjust your new budget.
**This article was provided by Banzai and modified by Reggie Rossignol.
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