The arrival of a new baby is all-consuming. In the early weeks, your waking hours are a cycle of feedings, diaper changes and Googling “Is it normal for a baby to (fill in the blank).”
Mustering the energy — and attention span — for otherwise routine tasks like showering and paying bills can feel like a tall order. You’ll be lucky to remember what day it is, much less when your next credit card payment is due.
Do your future, sleep-deprived self a favor and start prepping your finances early into your pregnancy so things can run on autopilot for a while after the baby arrives.
If you don’t already have a budget, start there, says Cecilia Williams, a mother, certified financial planner and the chief operating officer of Halbert Hargrove, a financial planning firm.
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“Outline all your current income and expenses so you and your partner have a solid understanding of where your money goes each month,” Williams says. “This will absolutely need to be adjusted as you get closer to your due date, so having a starting point is priority No. 1.”
Then build a plan for managing the other costs, large and small, that come with having a baby.
1. Research the cost to deliver your child
The price tag for childbirth is steep. The average cost for delivery can range from $10,000 to $20,000, depending on where you live. Even with insurance, new parents can expect to pay several thousand dollars out of pocket for maternity care.
Contact your insurer or the hospital where you plan to deliver to get more specific numbers. Then take a deep dive into your health care coverage to understand your coinsurance, deductible, maximums and coverage limits.
Anthem, United Healthcare and other major insurers have tools you can use to get estimates of total and out-of-pocket costs, based on your plan. Use these figures to set a realistic savings goal to cover them.
Have access to a flexible spending account? If timing allows, set your contributions to save incrementally, tax-free for your hospital bills. When hospital bills start rolling in, you can pay directly from your FSA or use a rewards credit card and submit for reimbursement.
2. Plan ahead for parental leave
Paid parental leave is far from guaranteed. 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 leave, according to a 2019 survey of employer …….