How to prepare yourself financially to parenthood: 7 tips you should know
The first thing you might think of becoming a parent is probably being healthy, reduce drinking, quit smoking, start positive thinking. The priority (before the magic process of being impregnated or impregnating that one) is health.
You’d probably see your physician, stop (or reduce) alcohol intake, take multiple tests, think of blue or pink baby room interior. My dear friend refused my kind invitation to a wine testing, where you get tiny 1-ounce portions of wine in fancy glasses, just because she and her hubby were thinking of the future process.
But well, if you are IN the process of having a baby in the upcoming decade, you’d probably need some less romantic thoughts than a name of your future offspring. Namely and toughly, finances.
We do have some financial recommendations for you, shall we?
1. Have an emergency fund set
No surprise, you’d better have this rainy day fund that may let you live nice and effortless life for at least 6 months, even if both partners are stable, have jobs and passive income resources. You’re going to get one more family member with a zero income yet huge spending. Please think of expanding your financial cushion to a 12-months fund.
2. Start work from home or look for any extra income ways
Good time to look for some part-time jobs or a chance to work overtime at your job.
Sometimes revenue streams are so visible but you’ve never considered them.
For example, the lady who works at the front office of the dentistry clinic I’m attending is a fantastic tailor. Once I said a compliment to her beautiful pants, she said she had made it by herself. I was curious, she had time for a small talk. It turned out she was a single Mom of a 2-year-old and she had a decent amount of money tailoring clothes and even making other pants, shorts or even dresses for other people. She would find the clients via social media, friends and neighbours and would do it out of her office hours. Luckily, it did not conflict with her major job. (I forgot to ask if she made some clothes for her little one, which would be a huge saving to her budget, too).
3. Learn your health insurance policy
Costs of hospital bills may vary, but still some costs are non-deductible. Even if you have health insurance, you’ll probably be accountable for some out-of-pocket expenses when it comes to your childbirth. You’d better make your own research and find a plan that is the best for a pregnancy and childbirth and make sure it covers preventive care.
Ask yourself simple questions:
What type of visits will be covered?
Shall I pay for the C-section?
What are my deductibles?
Do I have a co-pay?
And we would also suggest having life insurance for you.
4. Plan your maternity / paternity leave schedule
Work out a plan with your partner about that – sometimes having both maternity and paternity leaves is a good idea if you may take those at different periods of time. Contact your employers to learn what benefits you might get besides the paid leave and for how long.
5. Create your child budget
That includes so many things: clothes, diapers, strollers, daycare and babysitters, toys, baby food, baby room interior.
Make a search for “baby lists” in your country, many moms are creating and sharing very simple lists that may give you a fresh idea of what you may actually need for your baby and your baby space around. Don’t deny your friends and relatives help. We don’t mean financial help only, some of your friends may come and help you with home cleaning or dogs grooming if needed. Think of a nice tradition od the food train, it gave so many calm evenings and effortless dinners for the parents.
And remember, pregnancy itself is not that expensive.
Brands are making money on pregnancy. Overpriced maternity clothes may be easily replaced by simple maxi dresses, oversized pants and hoodies, that’s a trend! Not to forget about exchange groups with your neighborhood moms, your elder sisters’ maternity outfits and your nieces/nephews baby “inheritance”.
Toys, strollers, high chairs might be gotten for free or for very little price from the thrift stores or yard sales. And “easy come – easy go”: if you get something for free, just donate it and give for free to other moms, it always feels good when you give back to the community.
Another financial recommendation: be minimalistic. Challenge yourself by buying what you really need
6. Make financial plans for childcare
Any option that you may plan should be calculated: childcare, nanny, home parenting. Think of hidden fees and extra spending. Some new Moms would rather work and spend most of the wage to childcare rather than lose their qualification and slow down the career, that’s also an option. Some families would be grateful to extended family members to fulfill the home grand parenting.
7. Think of the life insurance for yourself and make or adjust your will
It might be really stressful to think of a will at such a period of life but this is just a way of taking care for your partner and your little one. “You never know when”. You may designate a guardian for your child and decide who is going to be beneficiary of your estate and other assets.
Having a life insurance will give you peace of mind and is highly recommended because you got a new family member.
And the last recommendation (obviously not least): enjoy your parenthood!