Baby prep is a multifaceted process, involving everything from emotions to home decoration to childbirth education. And then there’s the question of how you’re going to pay for it. The fact that kids are expensive is well known. But for many parents the money question doesn’t get far beyond the general sense of needing “enough”, whatever that is— money to pay for all the inevitable expenses, and the vague looming long-term threat of astronomical college tuition.
Expenses can vary enormously according to your lifestyle and expectations. You can go all out with your maternity wardrobe and nursery extravaganza, or be extremely minimalist and frugal. But some variables are controllable, while others aren’t, and there are a few basic pieces of the financial puzzle that ideally, you would have in place before you start a family. Here, from the financial advice site FavStocks.com, are the three most important financial concerns to consider before having a baby:
1. Health insurance.
According to the Kaiser Family Foundation, prenatal care costs average about $2000. A vaginal birth in a hospital costs somewhere between $9,000 and $17,000, while a C section costs between $14,000 and $25,000. The baby’s hospital fees, usually calculated separately, generally run between $2,000 and $4,000. These figures are for average, low risk pregnancies and births.If specialists are required, complications occur at birth, or a baby requires a stay in the NICU, costs rise substantially, to the tune of tens of thousands of dollars. So going through a pregnancy without insurance is a huge financial gamble, one most people are not well equipped to take. In some cases there may be low cost or sliding scale clinics providing prenatal care, but complications can still raise the costs substantially. You can still get insurance even if you’re already pregnant-the law mandates that pregnancy cannot be seen as a pre-existing condition.
2. A nest egg for emergency expenses.
Having a baby is an unpredictable experience, and it is possible that unpredictable circumstances might mean you’ll want or need to be out of work for a longer time than you expect. Whether this is due to complications with the birth or baby’s health, a postpartum mood disorder, or just your unanticipated desire to stay home rather than return to work, having a financial cushion gives you more flexibility. Financial experts recommend a savings equal to six months worth of expenses. Most people don’t have this kind of money lying around, but if you’re able to save some extra to have on hand for emergencies, it could help take some of the pressure off.
3. A plan for the future.
Experts recommend spending some time thinking about how your family will function financially in both the short and long term. This includes questions of income, childcare, education, and other expenses. What’s your post baby work plan? Do you hope to return soon, or stay home as long as you can? Do you have an understanding of childcare costs in your area? Are there other factors (career stability, personal fulfillment, etc) that would go into your decision to return to work or not? In many cases, returning to work is not the most financially productive choice, but it’s not the only consideration. Running the numbers on various scenarios can help you get a picture of the impact these changes could make on your lifestyle. Remember again that you can’t predict how your birth will play out, or how you’ll feel afterwards—so the plan you make may well change once the baby’s born, and perhaps change again multiple times after that!
For more on planning financially for pregnancy, see here.
photo: Yoshihide Nomura/flickr