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Saving money is a great way to make sure you are financially prepared for anything that may come your way. Something that can sometimes be planned or entirely unexpected is having a baby.
To make sure you have sufficient funds, should you save money before having a baby?
It is a great idea to save money before having a baby. You will have additional expenses (doctors, meds, diapers, etc.) and the mother-to-be will be off work for an extended period of time (which she might not get paid for). So having a good chunk of money saved before you start trying to have a child is an excellent choice.
If you are planning on having a baby sometime soon, you will need to make sure you are financially stable enough to handle the cost a little one will bring along. If you have some savings, you can set your family up for financial success. A baby can mean spending money on extra expenses and when you have been saving that money, you have it readily available for if you need it.
Having a baby can cost a lot of money, so being prepared with some extra money saved up is certainly helpful.
While it is smart to think of the future, it is advised you shouldn’t base your decision of when you will start having kids on how much you have saved up in the bank. It is more about how much money you have coming in consistently. So, the best way to financially plan for a baby is to know that your cash flow could handle the ongoing monthly expenses.
Still, it is a good idea to save up a little money beforehand since babies can bring some unexpected costs. Because of this, you should save money before having a baby.
How Much Should I Save Before Having A Baby?
So, you should save money before having a baby. It can help a lot when you will be adding a new member of the family. This will help with the expenses involved in this important life event.
But, how much should you save before having a baby?
It is recommended to have at least $20,000 in the bank before having a baby. Of course, this is because of what medical expenses are going to cost you without insurance. If you have good insurance, then a good goal to have saved would be 3-6 months of income from the mother-to-be saved.
With all the medical costs of having a baby, you will want to be finally prepared for them. It can cost around $30,000 to $50,000 for a normal pregnancy if you do not have insurance. That cost lowers to $4,500 if you do have insurance. Some tests for moms who are at risk or over the age of 35, aren’t covered by insurance. This is why it’s important to have enough in your savings to cover these expensive medical costs.
But, medical bills aren’t the only thing that is going to cost you money. Don’t forget about baby supplies and diapers, a nursery setup, baby gear, baby clothes, your maternity leave, child care, etc.
For an exact amount of how much you should save before having a baby, create a budget and try to put away a certain amount each month until you reach your goals.
As I mentioned above, it’s a good idea to have 3-6 months worth of the mom-to-be’s income saved up so if she has a medical issue and can’t work for 3-6 months of the pregnancy or has a longer recovery time than normal your family has enough money to live on. So if the mother-to-be currently makes $3,500 a month take home pay (after taxes) then having $10,500-$21,000 saved up before you have a baby is ideal.
Now that is obviously a lot of money and many people don’t have anywhere close to that saved when they have their first child. However, that is in an ideal situation. If you can live off the income from the father of the child while the mother is off work then the savings you will need to have will be far less.
What Should I Do Financially Before Having A Baby?
So, you should save up money before having a baby. While the costs of a baby is different for everyone, having several thousand dollars (at minimum) stashed away will help immensely.
So, how can you save money and what should you do financially before having a baby?
It’s important to have medical insurance and also to save up money as you are able to before you have your first child. Creating a budget can help you see what you will expect to spend and what you need to save.
You can also do things like having a baby shower or using hand-me-down clothes for your new baby which can help you save money. You could also save on child care costs by having a loved one or friend watch them while you are working if you are needing to go back to work.
Here are some additional ways you can financially prepare before having a baby:
- Get health insurance and make sure it’s up to date. Be aware of what you are going to spend on medical bills. Check to see what your insurance covers so you don’t have any surprise costs. Usually health insurance companies will require your baby to be added to your policy within 30 days of birth.
- Create a budget that accounts for the baby. Your spending habits will most likely change after the baby is born. Your monthly income may change as well so factor in how much will be going in and out of the budget. This can help you know what you are going to be spending and how much to save.
- Purchase life insurance. This can provide peace of mind and make your family financially secure. You can also add a policy for your child or add them as a beneficiary to an existing insurance policy.
- Get your debt under control. Some expenses can be urgent causing your debt to increase if you aren’t careful.
- Save a certain percent of your pay.
- Set up a savings account for the baby.
- Update or create a will. If necessary, add your wishes for childcare. You can designate a guardian and your child as a beneficiary.
- Plan a maternity/paternity leave schedule. Figure out with your spouse when or if you both will take off of work. Contact your employers on when you will be taking the leave and understand any benefits you may have. Policies vary from company to company.
- Adjust your emergency fund. Doing this is a good idea in case something happens. It is recommended to have a few months of living species in case of emergency.
By knowing good money habits, you can then teach them to your child when they get older. But, before they arrive, you want to have enough finances saved up for the necessary expenses. Thinking ahead of the future and saving money when you are able to are a great start to this new phase in life. These ways can help you to be ready financially before having a baby.
Saving money before having a baby is a good idea since there will be many expenses involved in caring for the new mother while she is pregnant, in the hospital, and also caring for the child after they are delivered.
Follow some of the helpful tips mentioned in this article on ways to be financially prepared for a new baby, because saving money before you plan on having a child will allow the childbirth to be less stressful (at least monetary wise).