Articles - Archived Expert Advice

Expecting Your First Child

My husband and I are expecting our Expecting Your First Child in August. Our goal is to be financially prepared, but we’re not sure where to begin. Can you offer some guidance?

Having your Expecting Your First Child is a very exciting time! It’s also a good time to prepare. Many new parents are shocked to hear the average cost to raise a child is around $12,500 a year, according to the U.S. Department of Agriculture. This can drastically alter your financial situation, but with proper planning, new costs will be easier to manage.

Start with your current budget and determine your bottom line. This can be accomplished by comparing your monthly income to your monthly payments. Where do you stand? Are there areas where you can curb spending to begin saving for your baby? If you plan to take unpaid maternity leave, or if one spouse plans to stop working after the baby’s arrival, now’s the time to practice living on less.

Be aware of your company’s health insurance benefits, and talk to your human resources department about any questions/concerns. Questions to ask include whether the plan covers prenatal care and tests, what delivery options are covered, is there a co-payment or deductible, and how much you can expect to pay out-of-pocket. If you are not enrolled in your company’s plan, or if you just can’t afford it, contact your state’s department of health and human services for free or low-cost coverage.

Another consideration is to purchase disability and life insurance. Disability insurance will help provide for your family if you become disabled or can’t work. We are more likely to become disabled during our peak earning years rather than die prematurely. Life insurance, on the other hand, will help provide for your family upon your death. If you currently have policies in place, check with your provider to verify you have enough coverage.

Finally, make sure your will and beneficiary designations are up-to-date, and correctly express your last wishes and arrangements to care for your loved ones. Best wishes!