Congrats! You're having a baby! Now what?
Preparing to have a baby is so exciting! But it's also stressful when you think of getting your finances in order. Fortunately, there are a few things you can do ahead of time to get yourself financially ready for your baby.
Getting all of your ducks in a row ahead of time gives you the peace of mind you need to enjoy the pre-baby process. And it lets you focus on your new bundle of joy once she gets here.
Here's our guide to newborn insurance and 9 tips to get you financially prepared for your new baby.
1. Prenatal Health Insurance
Your first step as an expectant parent is to make sure you have prenatal health insurance. Prenatal visits start as soon as you find out you're pregnant and you'll need coverage.
Most insurance plans pay for prenatal visits. But if yours doesn't, be prepared by budgeting out the costs of your prenatal care.
Another thing to note: deductibles usually count. Find out ahead of time what your insurance covers.
Even though your prenatal costs are covered, the hospital and baby costs usually go toward your deductible. If you need to, open a Health Savings Account (HSA) to meet your deductible.
2. Newborn Insurance
Call your insurance company and ask how to add your newborn to your insurance. You won't be able to do it until the baby is born. But they can help you figure out what paperwork you'll need.
This saves you tons of time when you're busy caring for the baby right away.
Don't forget about your dental insurance. Your baby won't have teeth right away, but they will eventually! Since you're working on insurance, you may as well get that paperwork taken care of too.
You want to file all insurance paperwork as soon as your baby is born. Most plans allow you 30 days from birth, but you don't want a sick baby with no insurance coverage.
3. Choose Your Doctor
Do you plan to have one family doctor? Or would you like your baby to see a pediatrician after he's born?
These are questions you should figure out before your baby gets here. If you know what doctor and hospital you're using, you can prepare better.
Make sure your doctor accepts your insurance plan. And get your billing and insurance information to them ahead of time. This saves you from having to do this paperwork while at the hospital.
4. Life Insurance for You and Your Baby
Evaluate you and your partner's life insurance coverage. And consider adding to your coverage before your baby is born. Now that you've got another mouth to feed, more coverage is a good idea.
Also, consider buying a life insurance policy for your baby. It won't cost you much and it's worth the time to give you peace of mind.
5. Write a Will and Update Beneficiaries
A will is so important to your overall financial plan. You need to do this before your baby is born. Again, it gives you peace of mind to know it's all taken care of.
Update beneficiaries on all of your accounts. This includes trusts, estates, retirement plans, and life insurance policies. These investments and policies are ineffective if the beneficiaries are incorrect.
6. Create a Budget
Your new baby will throw a wrench into your current budget. Sit down with your partner before your baby is born to get a new budget penciled out.
Account for daycare costs and increased health insurance costs for the new baby. Also, baby supplies like diapers, formula, and clothes need to be added to your budget.
Figure out how you'll pay for larger items like a car seat, stroller, and crib. With enough planning, you can save for these items and have them ready and paid for before the baby is born.
7. Find a Daycare
If you and your spouse both work, you'll need to plan for daycare. Daycare providers have a limited number of spots available for infants and many fill up fast.
Start interviewing daycare providers as soon as you're pregnant. You may have to get on a waiting list.
8. Talk to Your Accountant
Babies are expensive. But fortunately, there are some tax benefits to having a child.
You're eligible for child exemptions and deductions for medical expenses and childcare. Talk to your accountant before your baby is born so you know how to properly budget for taxes.
9. Keep Saving
Don't stop saving! This is even more important now that you're a parent. Keep investing in your retirement accounts.
Set up a savings account for your baby and start putting money away. Increase your own savings account so you can pay for things in the future, like diapers, bicycles, and Xboxes.
You don't realize it, but the costs add up and having a good cushion in your savings account is an excellent idea.
Also, consider opening a Health Savings Account (HSA) if you don't already have one. With a growing family, your medical expenses will grow too.
Enjoy the Baby Experience
Last but not least, enjoy the experience of getting ready for your child! Preparing for your baby is a beautiful time. So don't forget to slow down and enjoy it.
Take one last vacation with your partner. Take maternity pictures. Start a family scrapbook so your baby has memories to share one day.
Remember, getting newborn insurance ready now makes things easier when your baby is here. It gives you more time to take care of your child. And time with your baby is time well spent!
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