This guest post was written by Isaac Atia, Founder of 10BestRanked, an authority blog where Isaac reviews the top home and outdoors products.
Having a baby is such a beautiful thing. However, it can be scary when you aren’t prepared. Being financially stable can be highly load mitigating.
Taking the time out to make sure your money is in order, will be well worth it.
With an immense life change such as this, comes with immense habit adjustments. Especially when it comes the way you look at money.
- Revise the Budget
Being responsible for a human life. Means being responsible with your pocket-book. Revise or create a budget that is in tandem with adding new life to your life.
Understanding what is required of you, is a great first step to learning how to financially prepare for a baby.
New parents constantly state how the cost of having their child was a lot higher than anticipated. Delivery alone can cost you over $9,000. A caesarian section can run up a bill of over $12,000, according to the Kaisers family foundation. While many insurance policies will cover some or all of the actual delivery, there may be some costs you need to pay. Of course, we all know there are far more costs associated with having children.
Underestimating the cost spells trouble for your budget. Avoiding this mistake is easy if you are honest with your potential cost. Do your research and look for ways to cut costs.
- Be Disciplined
Do you eat out every other day or night? Or, get a large cup of coffee from Starbucks every morning before work? That $5 or $20 you spend every day, will add up.
This is money you could be saving if you cooked at home more often or would invest in a coffee maker. Practices like this will help you save money for the long haul.
Data shows that about an average of Americans who regularly buy coffee throughout the week spend $1,092 a year. This is a substantial amount of money that can go toward savings.
Keeping a close eye on every penny can really pay off.
- Emergency Cushion
You should of course be saving your money. One of my top 5 rules to live by, is to save always. Especially when children are involved. There are all sorts of bills that will come up when caring for a child.
Prenatal, post pregnancy, and pediatric care are just some of the vital expenses necessary for your growing family’s health. The bills for the first year of your baby’s life will cost an average of about $12,980.
This number can be higher depending on a number of different circumstances. You always want to be prepared, by stashing extra money away for a rainy day.
- Paternity and Maternity Leave
You need to be sure to get with your HR managers and figure out how much money and time you will have after the birth of your child.
The State Pregnancy and Parental Leave Act, federal Family and Medical Leave Act (FMLA) states you may take up to 12 weeks of unpaid leave, during which your employer is not allowed to retaliate as well as continuing your benefits.
Some employers will pay you for this time off. However, be sure to discuss this with them in depth. Your parental paid leave can be taken out of your sick time or vacation time. Just be sure you have clear understanding of their procedures.
- Child Care Cost
Also, figure out if you’d like to return to work or stay home. Because child care cost can make or break the pockets. If your baby is fortunate enough to have an abled bodied grandmother or grandfather that is willing to watch them, that is great and you can just skim through this next section!
If you are like most of the average millennial parents, then child care cost is something you will truly need to consider. Child care is pretty pricey across the board.
It can be slightly more affordable in rural areas than it is in the Urban ones. According to U.S department of Health and human services, we can conclude that it costs an average of $4,325 a year for non-relative child care. Research this ahead of time.
- Debt Control
When you factor in all of the child care cost, medical bills, furniture, food, diapers etc., you quickly realize that a new child requires a lot of money. Money you may not have at the time. Credit comes in handy when you don’t.
Being responsible for your money also means taking control of your credit. Continuously practice good habits by paying off your debts on time and not making outrageous, unnecessary purchases you may not be able to pay be back. Instead buy only what is needed and reconcile your charges as soon as possible.
- Trust Fund for the Future
Like any loving parent, you are probably concerned about your child’s life and their future. Setting up a trust fund for them is a great way to help them out even when you’re no longer there.
A trust fund is a great option. And not just for the super wealthy. There are plenty of benefits that come along with this kind of insurance.
Even though the money no longer belongs to you. You get to decide exactly how you want it to be used. There are plenty of benefits in having a trust. I am specifically referring to the tax breaks.
- A Will
However, if you aren’t too keen on a trust fund, a will works just as well. If at all possible, I suggest having a will in addition to a Trust. Wills are simple; however, you will need to make sure you look over it with an attorney so that your wishes are clear, concise and uncontradictory.
Both a will and trust fund can cost a substantial amount in legal fees. But are well worth securing your child’s future.
- Life Insurance
Speaking of the future. You will need to immediately consider life insurance. Life is unpredictable, but not Impractical. Take solace knowing that you have done all you can to ensure the longevity, and peace of mind for your family.
Look at as investment toward your child’s future, which if you do it right, is exactly what that is.
- Become a Minimalist
Even though caring for your child can seem outrageously expensive, it does not have to be. You can cut costs in all aspects of you and your child’s life in order to help cushion your pockets by becoming a minimalist.
Things like breastfeeding, instead of buying formula or buying cloth diapers, instead of the disposable ones. These things may seem inconveniencing, however the benefits of these practices highly out way the cons.
Our Final Say
Having A baby doesn’t have to be scary. It can be all beauty. Only if you prepare yourself for the journey that is parenthood.
Finances is just a small part of what you’ll need learn. However, your money well-organized and in order helps make life a little easier.
How did you or will you prepare for your baby financially?
This guest post was written by Isaac Atia, Founder of 10BestRanked, an authority blog where Isaac reviews the top home and outdoors products. Read his latest post about car seats here.