Thinking about having a baby? Or perhaps you just found out that you’re already pregnant. (Congrats!) The excitement of your news might be accompanied with concern, as you wonder whether you are financially prepared for your bundle of joy. Don’t panic! Here are some ideas for taking charge of your family’s finances prior to baby’s arrival.
Start saving right away
It’s never too early to start saving! Create a savings account for baby-related expenses such as diapers, childcare and Mom’s maternity clothes. Save some of the monetary gifts you receive from friends and family in this account, and put some of those gifts into a 529 plan, a Coverdell Education Savings or other education savings account once Junior is born. Cut back on luxury and extra expense items to help fund these new accounts.
Talk to trusted friends, family members or colleagues who have recently had babies before you build your registry and start buying on your own. They can tell you what gear you’ll really need for baby – and what extras that just collect dust in their homes. Consider second-hand items, especially with parenting books, toys and clothes. Local Facebook sales groups, friends and family and children’s resale shops are great resources for finding baby bargains. Just make sure any used car seats or cribs are up to current safety standards. Also, if you’re considering having more kiddos after this one, stick to gender neutral clothing. A lot of friends and family will be inclined to gift you cutesy boy or girl clothing at showers, so you won’t miss out on fun outfits.
Review your insurance policies
Read up on your health insurance policy to see what applicable co-pays and hospital costs you can expect for standard deliveries and cesarean birth. If you’re still in the planning phase, compare the costs of your employer’s plan and your spouse’s plan, and if possible pick the health insurance plan where the costs will be lowest during open enrollment, or if you are recently married and qualify for a life change update. Invest in disability and life insurance coverage if you’re not currently covered by your employer, or consider upgrading your current coverage.
Make big decisions now
While you have more time prior to baby’s arrival, prioritize some of the bigger financial decisions. For example, of you need to downsize your vehicle to save money or want to expand your living quarters by buying a house, look into doing these things now to reduce stress later. Have difficult discussions about estate planning and updating beneficiaries. Explore and decide what childcare option you would like if both you and your partner will return to work. Read up on your leave policies at both workplaces. You may be able to stagger your leaves so you can defer daycare for at least a couple of weeks.
Don’t scrimp on building wealth
Even though you might need to make minor adjustments, keep contributing to your retirement account and expand your emergency savings to accommodate your new baby. Review your budget and create a new one with an extra family member in mind. In the future, your child will appreciate having parents who are prepared for unexpected events like a job loss, and for their retirement.
As always, First Internet Bank is here for you through life’s changes and financial adjustments. Please reach out to a Relationship Banker with any questions about setting up savings for your new bundle of joy.