The moment you decide to have a baby, it’s like a black hole opens up somewhere that sucks up all your money. The list of things to bring home just never seems to end and your expenses keep piling on. Bringing a baby into this world calls for all kinds of responsibilities, financial prudence being at the top of that pile. The only way to do this right is to plan well in advance. This means, sorting out your finances well before the baby has arrived. This financial checklist will help you do just that.
Start early
Depending on how much you make each month, where that money goes and how much if left to dispose and to save, give yourself a timeline to build a financial cushion for when the baby arrives. This could take anywhere between six months to a year, or even more based on your expenses.
Anticipate costs and check your insurance
The whole prenatal care, delivery procedure and hospital expenses are likely to rack up a hefty bill. Therefore, this is the first thing you need to sort out. Do your research on how much the hospital will cost you, factor in medicines as well. You should also be prepared for any emergency or complication that may arise during the pregnancy. Check your health insurance for how much coverage it offers.
Choose your hospital, obstetrician and pediatrician before hand
Knowing where you’ll have your baby and with which doctor will give you much better clarity on the expenses. If you have a family doctor, you can seek their help in planning, researching and prioritising. In fact, you should even check for hospitals and doctors covered by your insurance for better savings.
Revisit your expenses
There’s no better time to revisit your current financial status and spending habits, and device ways to save better. Don’t just think about the prenatal care, delivery and baby-care expenses. You’re going to be financially supporting your child for at least the next 18 years. Reconsider how much goes into your savings and how much goes into your disposable income monthly. Look into where you can invest now, so things are easier later – this could mean anything, from a bigger house to investment options to an extended health insurance plan for your family and so on.
Check parental leave at your respective workplaces
Don’t wait until the last trimester to figure this out. Check how much paid time off both you and your partner can take from your respective workplaces. There’s going to be a period when your partner will need to stay around full-time. If their leaves aren’t paid for, that means you’ll be cutting down on income while your expenses increase. In which case, you’ll need to save up some more.
Shop smart
Focus on having the basic and essential items for your baby in place first. It doesn’t make sense to buy a high-end stroller or a fancy crib, if your baby is going to use it only for a couple of months. Similarly, avoid extremely expensive clothes and toys, since your baby will outgrow them quickly and these things will end up gathering dust. Don’t hesitate to accept clothes and toys that belonged to the kids of your friends and family – they’re likely to be as good as new, and will save you a lot of money. Keep an eye out for supermarket sales to rack up on the diapers, baby shampoo, soap, lotion and powder, breast pump, nursing pads, pacifiers and formula. And don’t hesitate to buy enough to keep you afloat fr a couple of months or more!
Start an ‘emergency’ fund
In addition to your regular savings, it is prudent to set up a small fund reserved just for emergencies. There’s no telling how much your expenses are going to increase once the baby arrives, and your disposable income can take quite a hit. More so if one of you has decided to quit working full-time. So, this is the best time to save enough to cover anywhere between six months to one year’s worth of family expenses.
Get life insurance
If you don’t already have this in place, now is the most crucial time to get life insurance. Life insurance is the best way to ensure that your family is well taken care of, should something unfortunate happen to you. Invest in this early, so that it’s mature by the time your child has grown and will require greater financial help.
It may seem overwhelming at first, but with patience and diligence you can ensure that your family is financially secured. Starting early with this will mean having fewer things to worry about when the baby arrives! Got more questions or doubts? Ask us!