If you are thinking about having a baby or if you are already expecting one….congratulations!! This is such an exciting time. There are always one million things to think about and plan for, but the biggest thing you need to have a plan for are your finances.
If you have a plan for your money, everything else will be that much easier! There will be no worries about the hospital stay, all the baby supplies you need, maternity leave, or child care. Your financial plan will be the backbone of every step forward you take.
Having a plan for your finances will relieve all your stress so you can just focus on loving that baby!
**If you are in debt, all of these principles apply exactly the same as they would if you weren’t in debt. If you are in the middle of debt payoff right now, you will hit pause, follow these principles and then pick up where you left off.
Stop any other financial focus.
Whatever you are focusing on right now financially, you will put it on the back burner until you have had the baby and are in a stable position. Whether this means you have returned to work, your medical bills are all paid or you are back in your normal routine of things.
Figure out what your benchmark will be to let yourself know it is okay to return your financial focus away from the baby and back to whatever you were working on prior to conceiving. For some this may be debt payoff, for others this could be saving for a house or retirement.
In my home, we pause debt payoff and start squirreling away cash as fast as we can until the baby arrives. Our final checkpoints for completion of what we call “baby season,” are completed maternity leave and paid in full medical bills. Until those two things happen, we save all of our extra money for the baby.
Healthcare
Depending on the type of insurance you have, you may need to be prepared for the hospital bill you will incur. To understand what you will need to save to cover potential hospital bills, you should know:
- What you insurance covers for maternity
- What your deductible is
- What your max out-of-pocket is
What will give you absolute security is having your max out-of-pocket saved prior to your little one’s arrival. If you don’t have enough time to save up that amount then at least shoot for your deductible. The last thing you want to stress about is having medical bills you can’t afford.
Some people will just ignore the medical bill aspect of giving birth because they can just set up interest-free payments with the hospital. Don’t do that! Have a plan for your medical expenses. You do not want to be paying off your child when they turn 10.
Maternity leave
If you work full-time or part-time, you are going to need a plan to make sure all expenses are covered while you are home with the baby. If you are a two income home and your income isn’t needed to live every month, awesome! You are one of the lucky ones who doesn’t have to save for maternity leave.
If you are like me and your income is a big part of your living expenses, you need to figure out how much money you need to survive while you are off of work.
The last thing you want is to put expenses on a credit card while on maternity leave and then have to pay all of that off after the fact. That’s like a really painful vacation where you have an alarm screaming at you every hour. Do you really want to go into debt on top of that?
For step-by-step instructions to prepare your budget for maternity leave, check out the related post below.
Related Post:
Step-by-Step How to Prepare Your Budget for Maternity Leave
Supplies
Babies come with a lot of stuff. That’s what everyone says. What they don’t say is you will be the one to buy the bulk of the stuff. Baby showers are awesome, but it is rare you won’t have to buy anything for your baby.
Pretty basic things are the
- baby’s room,
- bedding,
- furniture,
- toiletries,
- clothing,
- diapers,
- and wipes.
Then they also need to eat which means you need:
- a nursing cover,
- boppy pillow,
- bottles,
- nipples,
- breast pump and more.
Then there’s more! Babies also need exercise equipment, you know, an entire indoor gym. Plus, they need toys and books. People will always get your baby toys, so I wouldn’t waste any money on them.
Let’s not forget travel too. Your baby will need a car seat, car seat base, car mirror and any other travel accessories you may want.
To figure out how much money you need for baby things, make sure you build a registry. Once you have your baby registry put together (make one even if you aren’t having a shower!), add up the total for everything you need. If you are having a shower, you can probably count on getting 25-35% of the items off your registry.
If you are NEEDING everything on your registry, save up the difference (assuming you will get some gifts for a shower) for the items you will need to pay out of pocket for.
A baby registry is awesome because it will let you know how much you need to save for all the stuff you think you need. It will help you “see” everything and really decide what you need. The other bonus is, most places will give you a certain percentage off for completing your registry.
For example, Target gives you 15% off of your entire purchase (both online and in the store) when you finish your registry with them. We took full advantage of this and put all of our diapers and wipes on our registry too. Then we timed our final registry to happen the same time they were having a diaper sale. We got a year’s worth of diapers for next to nothing. It was amazing!
Wherever you end up registering, just check to see if they have a discount for completing your registry, and how long you have to do that shopping.
Having money available for all the supplies for your baby will massively decrease your stress level. The last thing you want to worry about is not being able to buy a crib or car seat for your baby.
Related Post:
How to Afford a Baby When You Have No Money (Only $165 for All Newborn Essentials
Childcare
This category may or may not require savings. If you are a stay at home mom, no savings! If you have multiple children in daycare who will stay in daycare while you are on maternity leave, you may need to save for childcare.
If your income normally contributes to paying for childcare and you will still be utilizing childcare when you are off work with your newborn, you will need to save for what your needs will be.
If you do not have other children who will still need childcare, you can be an overachiever and save ahead for upcoming childcare expenses when you return to work.
I haven’t experienced being on maternity leave with other children still in daycare. When I had my second baby, I just kept them both home with me during maternity leave. Now that they are in a daycare facility, they will need to stay enrolled and going during my next maternity leave. Otherwise, we will still be paying for daycare without using it, or they would lose their spot.
These are just things to think about when you are planning for your life after you have a baby. Everyone will be different, but this may be a cost you will need to plan for.
Food prep
After you have a baby, the very last thing you are going to want to do is cook. Trust me. You are going to want food ready for you, no effort needed and you will need lots of it to give you energy.
The best thing you can do is make freezer meals ahead of time. You will thank yourself for doing this. Depending on how many meals you plan to make, you will need to save $50-$150 for food and cooking supplies.
For the supplies, I love the disposable aluminum pans you can buy. There will be zero clean up so it makes everything that much easier. If you don’t want to create more trash for the world, you can use the dishes you have at home. I have just found using aluminum to be way easier and I don’t have enough dishes for the number of meals I make.
Freezer meals can seem a bit intimidating at first and I was super resistant to them initially. I promise, they will be totally life-changing and they really do not take that much time. I only make them in bulk when I am prepping for a baby.
Once you know what meals you are making and what ingredients you need, you will have a better idea of what to save. On average, I have spent anywhere from $50-$150 for freezer meal prep depending on the number of meals.
Related Posts:
How to Do Bulk Cooking Freezer Meals From Start to Finish
How to Integrate Make-Ahead Freezer Meals Into Your Daily Life
When a baby is on the way, the first thing you need to do is get your finances in order so you can start to save for all the stuff you will need. If you don’t have a budget set up already, you can do that here!
Related Post:
How to Set Up a Zero-Based Budget Without Ripping Your Hair Out
If you want to have a stress-free pregnancy and delivery, make sure you have your finances in order. When you have enough money to cover healthcare, maternity leave, childcare, all the millions of baby supplies and food, you will feel so peaceful.
Having a financial plan will let you stay completely focused on your new little bundle!
