When you decide to have your first child it may be slightly scary. Everything changes once you had a little one to your life. It is important that you be aware of the changes that are coming, especially the financial changes and prepare for them, as you get ready to have the baby. It is important to plan for your child's future now. You should take the time now to create a solid family financial plan.
1. Paying for the Delivery
It is important to have enough money to pay for the hospital and doctor bills that are associated with having a baby. Most doctors will set up a payment plan to cover their portion of expected costs. You will also be responsible for a portion of the hospital bill. You may be able to pay this before you go in, or you may need to set aside money so you can pay for it after you have the baby.
2. Daycare or Staying Home
Another area that you need to consider is the cost of daycare. Depending on your area daycare costs can be quite expensive. You may consider one spouse staying home with the baby, especially if one spouse if making around $20,000 a year. Take home pay after the cost of the daycare expenses and costs of working will have about the same effect as working at home. This is a personal choice for each family to make, but it is worth crunching the numbers to fully consider all of the options. If you cannot make the numbers you work you should reconsider walking away from your job. However, you may find that you can't afford to work with the cost of daycare and that it makes more sense for you to work from home or to focus on staying home with the kids. If you do decide to head back to work, you do need to be able to cover expenses while on your maternity leave.
3. Planning for Baby Supplies
You will need to purchase supplies for the baby. This includes clothing, furniture, toys and diapers. People can go a little crazy in this area. It would be a good idea to make a baby budget, and determine how much you can spend both creating and stocking a nursery for the little one. Then take the time to shop around for the best price on the things that you want. If money is really tight you can visit second hand stores or consignment shops for many items. Generally, you will need to buy the car seat new for safety reasons.
4. Long Term Costs
Additionally, you should consider the long term costs of having a child. You should begin saving money for college as soon as possible. 529 plans offer a good savings option for college expenses. You may also want to budget money for extracurricular activities. You will need to increase the money for your food, clothing, and medical categories.
5. Additional Responsibility
Finally, it is important to realize that your financial responsibility shifts entirely. When you make decisions about leaving jobs or moving for a job, you will have to consider how it will affect your family. If you lose your job, you will have to worry about how to find money to keep your home and feed your family. If you have a child with special needs, you will need to create a solid financial plan to care for him in the future. Being aware of all of the possibilities will help you create a solid plan for your family's future. If you choose to stay at home, you will need to plan for your personal financial future even if you do not have any income.