A young couple kissing their newborn at home

Having a baby is one of the most exciting times in your life. However, deciding to expand your family can also come with a lot of financial uncertainty.

We have compiled a list of advice to help you prepare for a baby financially and ease your worries. We want you and your partner to enjoy the excitement and joy that comes with this experience, and not have to focus on money-related anxiety.

1. Make sure you have health insurance and that it is up to date

It’s a good idea to check into your health insurance plan before the baby arrives to make sure that there are no surprise expenses when it comes to birth and newborn care in the hospital.

Be aware of the costs associated with birth and how much you will have to pay upfront. Health insurance companies typically require that your baby be added to a policy within 30 days of birth, and your insurance company should provide retroactive coverage to the date of birth. However, it’s a good idea to check into this before the baby arrives, while you have a bit more extra time.

2. Create a budget to account for your new family member

Since your spending habits are likely to change quite dramatically after having a baby, it’s important to revisit your budget and factor in the costs associated with caring for a child.

Having a child in the house might also mean that you or your partner won’t work the same amount as before, changing your monthly income. If you and your partner are planning to go back to work, be sure to account for childcare costs as well as create a new monthly budget so you both can visualize how your financial needs will change over the months following birth.

3. Set up a savings account for your baby

Babies are a great joy in life, but they come with a lot of expenses. From clothes to food to car seats, your spending will increase after birth.

You should consider starting an account to put money away for these expenses. Chartway offers several options for savings accounts that can meet your needs. Putting away a specific percentage of your paycheck each month can help you build up your savings.

4. Purchase a life insurance policy

While it may be stressful to think about purchasing life insurance, this is one of the best things you can do to provide peace of mind to you and your partner. Life insurance can ensure that your family will be financially secure in the event of your passing.

If you already have a life insurance policy, it is a good idea to consider adding a policy for your new child. You should also think about adding your child as a beneficiary to your existing life insurance policy.

5. Update or create your will

If you have a will, it’s important to update it to reflect your wishes for childcare if it is necessary.

Designating a guardian can save a lot of headaches and give you peace of mind, knowing that your child will be in good hands. Adjusting your will to designate your child as a beneficiary of your estate is also important, and ensures that they will be able to claim any life insurance benefits you have designated.

6. Plan your maternity/paternity leave schedule

Working with your partner to plan when or if you will both take time off of work is a good idea. Contact your employers and understand your benefits. Is your leave paid? How long is it? Does it have to be taken at a certain time?

Companies have varying policies, but all will fall under the FMLA federal act. Understanding your options will help you adjust your budget accordingly and determine when or if you will need to access additional childcare during the period directly after birth.

7. Adjust your emergency fund

If you do not already have an emergency fund, now is a great time to start. Kids come with a lot of unanticipated expenses, and it’s a good idea to have extra cash in case of an emergency or when additional costs arise. As you prepare for a baby financially, saving a few months of living expenses in case of an unexpected situation is recommended. A good place to start is by looking at where you and your partner can cut monthly expenses.

8. Learn how to teach your child good money habits

Babies do not stay babies. They grow into children and, eventually, teenagers! At some point, your child will start asking for money to spend. One of the best ways you can prepare for a baby financially is to figure out how you are going to start teaching good money habits to your child.

This means that when it comes time for them to make their own decisions, with your money or their own, they will make wise choices that will protect your financial status and theirs.

How To Teach Kids About Money