The Financial Impact of Your New Baby
While they are cute and cuddly, they are much more expensive than a new puppy. Your new baby is going to cost you a lot of money with very little monetary return, even though the return of love will be huge. Have you thought about all the costs you are going to have when it comes to your baby, outside of the nursery, diapers and clothing?
1. Health insurance
You should definitely get your health insurance in place before you get pregnancy so that you can make the most of your coverage. You will also want to make sure your coverage includes your prenatal, delivery, postnatal and new and well baby care. Know all the details of your plan. Research the deductible or co-payment that you will have to make at each visit and make sure you have your obstetrician or midwife listed as your primary caregiver, and interview pediatricians so that you’ll know who to list as your baby’s caregiver.
If you plan on delivering at home by a midwife, you will save the hospital costs, but you may have to rent some additional equipment in case an emergency arises. A home birth is normally not covered by insurance plans either.
Don’t forget to add your baby to your insurance policy after he born, or go to your state health department to see if you qualify for health insurance for your child. This plan will help you pay for all of the baby’s delivery and post-natal expenses as well as the numerous well-checks and immunizations required in the first year.
2. Get a will – or update your old one
If you already have a will update it to include your child and the name a guardian for your child and a trustee for her inheritance if something were to happen to you. If you don’t do this the court will name one for you and then divide up your assets according to state law. If you do not have a will create one as soon as you can in order to protect your baby’s rights.
3. Family leave
When you have a baby you will need to take time off from your job. If you are covered under the Family and Medical Leave Act you will receive up to 12 weeks of unpaid leave with continued health coverage. Also, the Federal Pregnancy Discrimination Act “prohibits an employer with at least 15 employees from reassigning you, forcing you to take leave, or refusing to hire you back because you are pregnant.”
For more information on this Act contact the US Department of Labor or the Equal Employment Opportunity Commission, 800-669-4000. You can also contact your state’s labor department for information specific to your area.
4. Child care
Are you or your husband going to be able to stay home with your baby everyday? While this is ideal, it is sometimes not a possibility. The cost of child care is very high, around $150 per week, plus more including taxes if you have a sitter or nanny come to your home.
Look into job-sharing, reducing work hours or working from home for part of the week. Many times you will find that with the cost of child care, it makes more sense to just stay home with your baby, than to spend all your money letting someone else raise them during the day.
Although your expenses will increase with the arrival of a new baby, your tax burden will decrease. Currently families get $1000 a year in a tax credit per child which helps their total tax amount in the long run. There are different exemptions and special circumstances that can get you more as well.
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