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November 30, 2020

What to Expect Financially When You’re Expecting

Preparing for a new family member is more than painting the baby room and regular checkups. 

Getting ready for a new child has a lot of different categories. When it comes to finances, you’ll have to juggle more expenses than you did before your child arrives. Here is a list of things you’ll want to look over before and after baby comes.

Health insurance

The first thing you should probably check is your health insurance policy. You’ll want to get a policy if you haven’t already. Most businesses offer health insurance, but if they don’t, you’ll have to shop around for the best policy. Talk to an independent broker or search through the Health Insurance Marketplace. Don’t pick the first one you see. Know what the policies cover and what they don’t. You don’t want unexpected bills ruining your special day. Remember to add your child to your insurance policy after delivery!

Unpaid leave

Depending on where you work, you probably won’t get paid time off for maternity/paternity leave. With that in mind, you’ll need to account for the lack of funds after birth when you and/or your partner will need to stay home from work. Get prepared and move the budget around to account for these changes. They’re only temporary, but they can make a pretty big difference if you’re not prepared for it.

Better budgeting

When a new child arrives, you’ll need to buy things you never have before. It’s exciting to buy cute clothes and fancy strollers, but after all those medical bills, you might find yourself with less than you thought. You may need to create a budget for before and after delivery to make sure things don’t get out of hand. The pre-baby plan should include medical costs and other necessary items (like car seats and breast pumps). Make sure your post-birth budget accounts for the regular costs of a growing baby. From diapers to regular checkups with your pediatrician, your monthly budget is not going to be the same again. Don’t get tempted by all those marketers out there. You don’t need to have a designer diaper bag to raise your child. Stick to the basics. It’s okay to wait and buy something later down the road when you need it. Or, stick it on your baby shower registry!

In case of emergency

When the life of your child depends on you, it’s important to prepare for the worst–even if we don’t want anything bad to happen. Making sure you have life insurance and a proper emergency fund is key to keeping you and your child safe. Don’t neglect to prepare for accidents and unexpected expenses. Growing kids are clumsy and no one knows when an emergency will happen. Have about 3-6 months of living expenses in your emergency fund and get a life insurance policy to make sure your kid is covered if you can’t take care of him/her.


Taking on new expenses means you’ll have less to spend on other things you care about. Finding new ways to save might become a favorite hobby of yours. Tax breaks are one way to really save money. Do a little investigation to see what you can save. Revisiting your W-4 is one way to start. You may also qualify for different types of tax credits:

  • Child Tax Credit – which is for families with a child under 17
  • Earned Income Tax Credit – this is for low to middle income workers with 1 or more children; the more kids you have the more you could get in credit.
  • Child and Dependent Care Credit – If you have to leave your children at daycare to provide for the family, you might be able to get credit for your kids. You might also be eligible for credit if you bring your kids to summer or sports camps–as long as you have to bring them there so you can work.

You can learn more about tax credits and childcare here.

Overall, focus the essentials when planning financially for your child. Know what you can and can’t afford. You don’t have to buy or invest in every single thing out there. Start small and keep it simple. The best way to save money is to skip anything frivolous. You can always buy more things later, but you can’t always undo or return things. Save more by borrowing or buying second-hand items like maternity clothing and baby clothes. Don’t be afraid to reach out to financial advisors or close friends and family for more specific advice for your needs as well.