Have a Baby and Stay Cool: Financial Strategies For First-Time Mothers
So, you believe that you are fit enough to take and move on to next episode of your life? The real game changer is by having kids, not only for individual reasons but financial aspects as well.
For the first time you hold your newborn baby in your arms, the last thing on your mind is the decisions you have to make and how you’re going to provide him or her with a good future. But, if you are uncertain and have no specific plans for your child, especially about financial matters, a bright future may be out of the picture.
The United States Department of Agriculture reported that a family would spend around $284,570 (with estimated inflation) for shelter, food, and other essentials to nurture a kid until the age of 17. According to the research, the basis of the total expenses of nurturing a child is on these percentages:
29% of housing
18% of food
16% for education or child care
15% of transportation
9% of healthcare
7% of miscellaneous fees
6% of clothing
The research does not even include data of the expenses connected to college fees or pregnancy expenses. With the soaring amount of college fees, you can anticipate the expenses of raising a child will rise significantly.
There will be lots of circumstances that will happen down the road every first-time parent will bump. Optimistically, this article will provide you valuable insights you need to do so that things will be more comfortable later.
Learn About Your Health Insurance
Having a baby is undoubtedly expensive. Despite having a health insurance and a healthy pregnancy, you will still be having a hefty hospital bill. Thus, it is safe to know what are the expected costs in advance.
Talking about health insurance is a rather complicated topic. It changes entirely relying on which health insurance you currently have and sometimes depending on where you live even. The smartest thing you can do is to understand your insurance, and know what expenses to expect.
It is ideal to enlighten yourself and study the details of your health insurance. A few vocabulary terms you may encounter are:
In-network / Out-of-network
The essential info in the article is the list of concerns it provides you to inquire your health insurance provider. In case you don’t know what to anticipate, being aware of which questions to ask is somewhat difficult. Contact your insurance provider, get a pen, and ask questions.
Does the establishment you work for grants a paid day off for having a newborn? This concern is the first item you must answer.
Some establishments may or may not have a formal policy for maternity leave, and even if some does, it may not include a pay. If your work compensates when you take time off, it might not mean entirely paid.
If you are not satisfied with the period of maternity time you get off, do not hesitate to ask if you can also utilize some of your paid vacation leave as a part of your maternity leave.
When preparing for leave, determine your bills and other necessary expenses covered.
It is never too soon to start grinding numbers to precisely know what is your position on finances during the time you are out from work.
If you are fortunate enough to get paid during your maternity leave, consider the money you receive as comparable to other paychecks. You will still have to pay taxes just like your average salary.
Make a Fresh Budget
It is clear that your expenses will change after you bring the newborn home. There are new expenses that you must include in your budget like, diapers, childcare, and additional food. Now is the moment to take a good look at the current budget you have and make a post-delivery allocation that you can rely on efficiently.
Can you afford the additional expenses? If not, take some moment to look at areas where you might be able to cut back like your budget for food. Having the time to slash down expenses will help you save money in the days to come.
It is so easy to go overboard when purchasing goods for your new baby, but also be mindful that they grow quickly. So, spending lavishly on designer baby apparel and those trendy strollers might not be worthy at all.
You can save money by shopping second-hand items, and it can be the best decision you can make. You can contact Ashe Morgan as your reliable financial advisor if you happen to have this concern.
You may not realize it as of the moment, but your newborn baby will only use the clothes you purchase them once or maybe twice before your kids outgrow these clothes. Which is why buying used clothes is a smart technique.
Initiate an Emergency Supply
If you do not have emergency supply at the moment, now is the time to initiate an emergency fund. We cannot predict the time especially when it comes to unexpected expenses. Saving money is done by taking baby steps. It is easy to get devastated and discouraged when your savings objective appears unreachable.
Anticipating your first baby is without a doubt exciting. On the other hand, it can also be overwhelming when it comes to financial costs. It is so important to understand and be knowledgeable about your coverage so you can acquire an accurate measure of what you will pay for expenses.
Also, make sure that you know your maternity leave choices and the coverage you will gain when you the take time off work. Look at your current budget and make a fresh one to supply for your new baby at home. Lastly, ascertain you reduce the stress by assuring you have enough money set aside to pay for unanticipated costs.
When we talk about babies and see those adorable and tiny socks, we quickly forget the fact that raising one is extremely expensive. On the bright side, it is always possible to nurture a baby while minimizing the heavy financial necessities, and it is through early planning and meticulous financial moves.