If you are you planning to have a baby or expecting one anytime soon, it is wise to do some financial planning in advance to avoid any money-related stress after the birth of your bundle of joy. This is very crucial because your expenses will increase, and in the case of working couples, there is a possibility that income could reduce if the mother takes a sabbatical to care for the child. Financial experts say that just a little bit of personal finance planning can help couples avoid financial stress. In this article, we explore some of the financial must-do’s that will help all expecting couples become successful parents.
Let us take a look at some financial tips that will make your journey to parenthood a joyful one:
- Add your baby to your health insurance policy: For those who already have a health insurance policy, first, contact your provider and see what is covered well in advance. Inform your insurance company and make sure you add the child to your policy after the birth. First, check if your insurance firm will allow you to add the child immediately after birth or if you have to wait for 90 days. If you do not have a policy, it is wise to apply for a health insurance policy. There are a few health insurance policies that allow parents to add their new-born as part of the plan with no additional premium charges, and some insurance companies also provide vaccination cover for the baby. All these benefits are covered under the maternity benefit section in your insurance policy. The best method is to add the baby to a group mediclaim policy.
- Start saving up and spending less: The best thing to do is to set aside some money every month. You can open a recurring deposit and put in money. The other option is to open a separate savings account for the child. This may also be a time when you will be tempted to splurge on decorating your baby nursery, renovating your home or just buying baby products. But stop and think before you splurge.
- Get the right credit card: When you are a new parent, having the right credit card can help you gain some convenience. Make sure you compare credit cards and choose one that is ideal for your needs. Choose a card that will give you good cashbacks and rewards for purchases that you will most likely be making as a new parent. Also, look for a no annual fee credit card because it will help you save money. On the whole, if you use your credit card wisely, it will help you deal with expenses in a much more flexible and relaxed manner.
- Plan your leaves: Sit down with your spouse and decide how much time you can take off from work. Most importantly, check how much paid leave will be available to you. For mothers who are taking maternity leave, find out the terms and conditions from the employer. Also, check if your company allows you to work from home after the maternity leave so that it can provide you some flexibility and you can still continue to earn. The bottom line is to see how your maternity leave will affect the household expenditure and decide accordingly. If you cannot afford to take paid leave, ask a parent or sibling to help you take care of your baby when you are at work.
- Budget the baby-related expenses: Make a list of all the expenses that you will incur before the birth and after the birth of the baby. See how much will be covered by insurance and check the funds you have at your disposal. Explore some personal loan options well in advance so that you don't have to run around at the last minute to arrange for funds. Having a budget will help you know exactly what your expenses will be like and you will not be in for a rude shock. Also, this helps you plan your spending.
- Try to find a pediatrician in your insurance network: The smart thing to do is to check if your insurance provider covers the cost of a pediatrician under the policy. Contact your health insurance company and find out if you have this facility because it will help you save a lot of money as far as pediatrician consultation charges are concerned.
- Go for hand-me-down clothes, toys, and other baby equipment: We know it is an exciting time and you want to buy all the cute baby clothes you see. But watch you’re spending as it is very easy to get carried away. Instead of splurging on baby clothes, blankets, toys, diaper bags, cradles, etc., try to go for hand-me-downs from friends and relatives who have already had babies. The tip here is to rotate things among parent groups to cut down unnecessary expenditure. This is a wise thing to do because the baby will outgrow the clothes within a few months anyway, so there is no point splurging on baby clothes and other items.
- Plan your childcare expenses: If you are planning to return to work after your maternity leave, you have to make arrangements for child care during your working hours. But before looking for a nanny, first, ask if your parents can pitch in. It will be easier for you to trust your parents with childcare and this will also be a more economical option.
- Revise your life insurance coverage: If you do not have a life insurance policy, it is time to get one. For those who already have one, it is wise to increase your coverage due to the new addition to your family. In the long run, this will be of great benefit.
Having a plan when a baby is on the way is a must. The trick here is to start getting organised and plan ahead of time so that you can welcome the new addition without any kind of financial stress. This will make the transition to parenthood a lot easier.