Planning to have a baby involves a lot of financial preparation along with getting your body and mind ready. It’s important to know that you’re financially ready to start a family. There are many factors in determining whether you can handle the financial responsibilities that come with having a baby. Here are six things to consider when determining if you are financially ready to start a family:
1. You understand your health insurance coverage and expected costs.
Having a baby can be expensive, even with health insurance. Make sure you know exactly what your health insurance covers so that you aren’t overwhelmed with the costs of prenatal care, labor, delivery or any other medical bills.
2. You have a “rainy-day fund” or savings account.
We can’t say it enough, starting a family can be expensive. If one of your priorities is already saving, you’ll be prepared for saving for your baby’s education, emergencies, and costs associated with everything you’ll need during pregnancy and once the baby arrives.
3. You can stick to a budget.
With babies, things won’t always go according to plan. You may underestimate the costs of diapers, strollers or car seats and find that you’ve gone way over budget. It’s important that you know how to stick to your budget and have a plan for the times you may exceed it.
4. If you have debt, is it under control?
Whether it’s credit card debt or student loans, is your debt under control? Will having a baby put a strain on your ability to continue to pay down your debt? This is an important question, as it will affect your ability to save and provide for your baby.
5. Have you thought about child care?
If you and your partner will both continue to work, who will look after your baby? It’s important to have that discussion. Do you have family that will agree to take on the responsibility of childcare, or do you intend to use a childcare provider or daycare. How much will that cost, and is it in the budget?
6. Have you discussed maternity and paternity leave with your employers?
How much paid maternity leave do your employers allow? How long are you planning to stay at home with your baby?
If you answered yes to most of these, we’d say you’re in a great spot.