Preparing for a new baby
Welcoming a new baby into the family will change your life in countless ways. While you may not be able to prepare for some things, taking a few simple steps now can help you approach this exciting new life stage with confidence. Here are some tips to ease your transition.
Tip #1: Review your health insurance
Make sure you have comprehensive health insurance. If you don’t, pre- and post-natal care can be expensive. Most employer and Affordable Care Act (ACA) insurance will cover at least part of the care you and your child will need. Another option is to establish a Flexible Savings Account (FSA) or Health Savings Account (HSA), which can help pay for qualifying medical expenses with pretax dollars.
Tip #2: Save for emergencies
Set aside funds for both major and minor emergencies to ensure that your family is prepared for whatever life has in store. For your main emergency fund, try to save 3 to 6 months of living expenses so unforeseen events won’t derail your financial security. You may also want to put aside around $500 for smaller emergencies.
Tip #3: Schedule maternity or paternity leave
Check into the maternity and/or paternity leave policies at work for each parent. Depending upon your state and the size of your employer, you may also be covered by the Family and Medical Leave Act (FMLA) , which can provide up to 12 weeks of unpaid leave. If you do need to take unpaid leave, it’s important to consider how you’ll make up for potentially lost salary.
Tip #4: Research daycare
If both parents will be working, now is a great time to start planning for daycare. Full-time childcare can be expensive and difficult to secure. You may want to research your options before the baby is born and figure out the opportunity costs of having one parent stay home.
Tip #5: Purchase disability insurance
Disability insurance can help replace your income if you find yourself unable to work due to an illness or accident. It allows you to rest assured knowing that your child will be taken care of. Use this calculator to help determine how much coverage you may need.
Tip #6: Update your will
As you prepare for parenthood, it’s important to review all legal documents with your child in mind. Make sure to provide instructions for your child in your will. Also, consider updating the beneficiaries on your life insurance policy or retirement plan. Specifically express your wishes for your child in case anything happens to you.