Pregnancy and Baby Care: Financial Planning and Management

Pregnancy can be exciting, but it also could bring along uncertainties, especially in the aspect of finances.

For first-timers, pregnancy can be overwhelming, both physically and emotionally. Aside from bearing the burden of up to 50 extra pounds, there’s the constant anxiety surrounding issues like preparing a baby’s room, picking a name, and dealing with a host of logistical items, including healthcare facilities etc…of course this is just the beginning.  Once the baby is delivered, the level of complexity certainly increases. Hence, the importance of dealing with a wide range of near, medium, and long-term financial planning before delivery.

In this article, we cover a few simple steps you can take to prepare financially for your new baby.

1. Educate yourself.

If you are a first-time mom, it is essential you equip yourself with information on what it takes to financially scale through pregnancy, delivery, and the baby’s first year. Some questions you should seek to answer are; What are the baby’s needs? What have other mothers bought? What was useful and what was not? What are the options?

Talk to other experienced and expectant mothers about their experiences and also ensure you carry your partner along. Practice run with your partner if possible.

2. Evaluate your spending pattern.

It is essential you assess your spending. You can discuss with your spouse or partner about the spending expectations pre- and post-baby and work together to create a new household budget.

Look at the areas you need to cut costs. You must be prepared to adjust to a new spending pattern that accommodates enough to save for your baby.

3. Consider your access to maternity leave.

If you are an employee in an organization, it is essential you review your employee benefits to know how much time you get off work and whether you’ve paid or not.

You can schedule a chat with human resources or talk to your boss/manager to determine how many weeks or months you can take off work and whether you’ll be paid all, a portion, or none of your salary while on parental leave. This step is important because many families are hit with a double-whammy after childbirth. Not only are their living costs increased by the presence of a new baby, but taking parental leave may slash their take-home pay.

4. Consider getting medical insurance

Most HMOs cover delivery and prenatal care in their packages; however, do make sure you read the fine prints on what mommy and child post-natal services are covered.

5. Create a baby fund

Create a “baby fund” savings account to help cover the first 12 months of your baby’s necessities and/or unexpected doctor visits.

Draft your pre-baby budget. Knowing your out-of-pocket medical costs will help you understand how your income will be impacted in the coming months. Also, prepare a shopping list for your new addition and adjust your budget accordingly. Babies come with plenty of expenses, so set a limit on both necessary and optional purchases.

6. Plan for early education costs

One of the biggest costs of raising a child is education. College costs alone are increasing faster than the rate of inflation. But that doesn’t take into account elementary, middle, or high school costs. Before moving into a new locality, check out the quality of local public schools. If you choose to send your child to a private school, you may end up paying for 15 years of education even before college tuition.

Open a College Savings Account starting now, you have 18 years to let those investments grow. Consider opening a 529 college savings plan and making automatic monthly contributions.

7. Practice living on less

When it comes to budgeting for parenthood, the keys are equal parts of preparedness and flexibility. Your income might change after having a child, even if temporarily. One parent might take some unpaid maternity or paternity leave, or one might leave work entirely.

Practice living on this lower income in the months leading up to your due date. Set aside the income of the soon-to-be stay-at-home parent to get accustomed to a smaller budget and to save for child care and other upcoming expenses. Anticipate that variable expenses

like formula, diapers, and childcare won’t last forever. Those costs will fall off your budget as your child grows, and expenses like dance lessons and auto insurance will eventually take their place. Also, you can consider borrowing or getting second-hand standard maternity clothes and other things you might use for a limited time, but ensure everything checks out with current safety standards. 

like formula, diapers, and childcare won’t last forever. Those costs will fall off your budget as your child grows, and expenses like dance lessons and auto insurance will eventually take their place. Also, you can consider borrowing or getting second-hand standard maternity clothes and other things you might use for a limited time, but ensure everything checks out with current safety standards. 

like formula, diapers, and childcare won’t last forever. Those costs will fall off your budget as your child grows, and expenses like dance lessons and auto insurance will eventually take their place. Also, you can consider borrowing or getting second-hand standard maternity clothes and other things you might use for a limited time, but ensure everything checks out with current safety standards. 

like formula, diapers, and childcare won’t last forever. Those costs will fall off your budget as your child grows, and expenses like dance lessons and auto insurance will eventually take their place. Also, you can consider borrowing or getting second-hand standard maternity clothes and other things you might use for a limited time, but ensure everything checks out with current safety standards. 

8. Automate your savings

Adjustment of financial goals, tracking income, creating a budget, and an emergency fund are ways to financially prepare for your bundle of joy. Additionally, it is advisable to automate your savings to achieve better progress. Automating your savings is a stress-free way of helping you to be consistent with your saving pursuits without having to visit your bank.

9. Follow-through

The easy part is creating all these ways to save when expecting a baby, the hard part is following through with the laid-out plan. You need to try as much as possible to keep up with these plans to achieve your financial goals. Remember, it’s easy to write out a detailed financial plan, but requires some level of discipline to implement it.

10. Write or adjust your will.

Unfortunately, tragic things happen and you want to be certain that your child is well taken care of in the event that one or both parents inevitably pass. Hence, it’s a no-brainer that you include your child in your will.

In conclusion, your life will never be the same and neither will your wallet. This is not to scare you, but to highlight the fact that expenses begin adding up as soon as you become pregnant. Nevertheless, aside from the financial planning, be sure to stay mentally and emotionally prepared for the blissful motherhood life ahead.