Parenting is somewhat expensive since you’ve to care and financially support your precious addition to your family. Having a child means you’ve to stretch your budget to meet the needs of the two of you. Once you welcome a new baby, you need to be financially prepared to meet the costs for diapers and other baby gear along with health insurance cover.
If you’re working, you’ll need to hire a nanny to look after your child while you are away. Another option is to take your child to daycare, but you also have to pay for the services.
Financial preparation is vital to anyone aspiring to become a new parent and even those who have already delivered.
Here are financial tips for new parents
Include Your Child to Your Health Insurance Plan
To get your child included in your health insurance plan, you need to contact your insurance provider and furnish them with the required documents. Your insurance provider only initiates this process after notification, and not automatically as most new parents think. Based on your financial stability, you can opt to enroll for a new plan or make changes to your existing health policy. Most insurance providers stipulate the inclusion of a baby into a parent’s health insurance plan within 30-60 days after delivery.
If done within the set timelines, your child will be covered retroactively.
Set Up an Emergency Fund
Unemployment is devastating, especially when your family is young. Having an emergency fund will help you meet your financial needs and those of your child in the event of job loss. An emergency fund provides reprieve for a new parent while hunting for a new job. The amount set aside for an emergency fund is dependent on the new family budget.
This type of fund is ideal for new families who depend solely on one family member’s income.
Create a Household Budget
A new child comes with additional expenses. There is always a notable increment in an annual family expenditure after welcoming a new child. Childcare expenses such as clothes, diapers, food, medical costs can surge abruptly taking a significant percentage of your budget. Some expenses such as diapers and child toys are periodical while others are a long-term investment. By creating a household budget, you’ll get to learn what upfront costs drain your budget the most and what periodical expenses will influence your budget in the long run.
Budgeting is now hassle-free, thanks to the development of various budgeting apps like Mint.
Adjust Your HSA Contributions
Health savings accounts abbreviated as HAS are usually undervalued pre-tax benefit that can be relied upon to clear the existing and unforeseen health care bills for you and your family. All monies channelled to the health savings account and get unused with the current year; they’ll be carried forward to the following year and continue growing in your account without being subject to tax.
If you’re eligible for your employers sponsored health plan, the HSA annual contributions which don’t surpass $6,850 can be withdrawn in every paycheck. However, many people don’t exploit this fully, but with enhanced health and wellness that are associated with a newborn, it’s essential to take advantage of that.
Money contained in your HSA account can be used to cater for an array of health-related products which may include diagnosis fee, breast pumps, infant formula, and many more.