5 Ways to Prepare for a Baby Financially
Key Takeaways:
- Consider how much time you’ll need away from work.
- Understand the cost of care, from pregnancy to childbirth to postpartum.
- Estimate the cost of baby gear and supplies.
- Explore setting up safety nets and look for potential tax breaks.
If you’re growing your family, congratulations are in order. You’re embarking on an exciting adventure. Taking some time to plan for the financial realities can go a long way toward putting your money where it will matter most in this new stage of life.
1. Time Away from Work
Having a baby is a major medical event, and most moms can expect to need several weeks of recovery time. Talk with your doctor about the amount of time you’ll be going with a reduced income or no income at all. Make sure you understand your employer’s maternity, paternity, and disability leave policies and how they will affect your paycheck.
2. Healthcare Costs
The cost of pregnancy care, childbirth, and postpartum care can range from nearly $12,000 to $18,000 or more, depending on your state. Hospital births are typically more expensive than home births, and costs increase with more complex deliveries.If you have health insurance, talk with your provider about what’s covered and what you’ll be responsible for. Most people end up paying a few thousand dollars out of pocket.
If you don’t have health insurance, ask your provider about assistance programs at your birthing facility and check into government assistance programs including Medicaid and the Children’s Health Insurance Program (CHIP).
3. Baby Gear
Make a list of the startup baby necessities you’ll need, plus ongoing purchases to account for in your monthly budget. Common items include:
- Car seat
- Stroller
- Crib and bedding
- Diapers
- Feeding essentials
- Clothing
- Childcare
- Toys
4. Safety Nets
In addition to health insurance for your child, think about setting up some funds for the future like life insurance and a college savings fund, even if you can only contribute a few dollars a month. Use our United savings calculator to see how small amounts can add up over many years.
5. Tax Breaks
Having a baby may qualify you for tax advantages like the Child and Dependent Care Credit. Talk with a tax advisor to make sure you’re not missing options that could help offset your new expenses.United is here to help with a full range of financial services for you and your family. Let’s connect on what you need. Stop by your local branch or schedule an appointment online.
