How to Prepare Financially for Having a Baby
Think it’s time to add a baby to your family? It’s such an exciting step! Many couples feel mentally & emotionally prepared, however most of them overlook their financial readiness prior to getting pregnant. As a CPA (Certified Public Accountant) and mama of two kiddos, I am here to help! Below is a basic list of costs to consider before having a baby to determine if you are really ready.
- Medical Bills - Talk to fellow coworkers who have had a baby within the last few years to get an idea how much they spent on medical bills to have a baby. This can vary widely based on which insurance plan you have, so talking with coworkers under the same plan is a great way to get an estimate. Remember, you’ll have medical bills for both mom and baby.
- Health Insurance - What will the monthly premiums cost for your health insurance to add a baby? Monthly premiums for single coverage are much lower than family coverage after a child is added under your medical plan. A good way to determine an estimate of your monthly premiums under various plans is to ask your HR department.
- Daycare - What are the average daycare costs per month? Again, talk to your coworkers who have children in daycare. It will vary depending on in-home care, hiring a nanny or attending a daycare center. Ask them what their weekly or monthly rate is. Don’t feel comfortable asking? Instead, call a few local daycares to ask about rates and what their openings look like. I remember being shocked by the cost of daycare. At the time, the cost of sending one child to daycare was more than my mortgage payment! If you are not sending your child to daycare and you or your significant other plan to stay home, what will the loss of income do to your monthly budget? Can you still make things work financially?
- Baby Furniture / Gear - How much does baby gear cost? Things like a crib, stroller system, nursery furniture & decor, and car seat are other costs to consider. In fact, there is a wide range of options and prices available which is great! After doing some research, try to estimate what you’d like for your baby and add these expenses into your budgeted amount that you want to save.
- Other Costs - What other costs do you need to factor in? Depending if you plan to breastfeed, formula could be an added cost. You’ll also need to factor in the cost of diapers. Depending on the type of formula and diapers you use, both of these individually can be $100+ a month (or $200+ combined).
Hopefully this list gives you an idea of some expenses to consider when preparing to add a little one to your family!