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A Gift For Moms: Planning for the Financial Impact of Children

Mom and Baby

(Part 1 of 2)

Happy Mother's Day to all moms!

Here's a little something for new moms and moms to be. Children are a special blessing and their arrival brings boundless love and joy into our lives that you can't put a price on. But adding a child to the household impacts the family budget--and women especially--in very measurable ways. Whether you're already holding your precious gift or anxiously awaiting your delivery day, here are some financial matters to think about and plan for before and after baby arrives. Check your health insurance If you are eligible for employer-sponsored health insurance, compare plan options to see which option offers the best coverage so you'll be prepared during the open enrollment period. Along with comparing deductibles, co-payments, and premiums, look at coverage for prenatal visits, hospital and midwife services, infertility treatments, and dependent care. Keep in mind that while a lower premium might be best for your pocket, the coverage might not be best for you and your baby. If you are married, decide which spouse's policy offers the best coverage. Once you've chosen a health plan, read the policy carefully to see what maternity coverage is provided. Also find out if the policy covers complications from a premature birth, including a stay in a neonatal unit, and whether a separate deductible applies if your baby is hospitalized beyond a certain period of time. Typically, your baby will be covered under your policy from the time of birth, though you'll have to contact your insurer to officially add your child to the policy. If you're adopting a child, make sure you know when your policy will begin coverage. Budget for baby Some expenses typically increase when you add a baby to the household, like:

  • Groceries, including diapers, formula (you may use some even if you're nursing), and baby food

  • Clothing and baby equipment

  • Transportation costs--Will you need to buy a larger, more practical, or second car?

  • Housing costs--Will you need to move to a larger apartment or house, or will you simply need to push a bureau a few feet to make room for a crib?

If a housing move is in the cards but you aren't able to do it before baby arrives, don't worry. Plan as best you can ahead of time--request a free copy of your credit report and clear up any issues, compare mortgage rates, request a pre-approval, look at real estate listings to get an idea of the inventory available in your price range, get estimates to remodel your existing space (if that's a possibility), and so on. Thinking about the ways a child can impact the family budget often leads to a larger question, Will you go back to work?

We'll take a longer look at that question when this gift for moms continues.

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