Tackling Financial Literacy as a New Mom
There are a few moments you can point to as “life changing” and “life altering”. Having a baby is certainly one of those moments. There’s nothing quite as scary, exhilarating, and exciting all at once! The moment the strip turns pink, the life you once knew is a thing of the past.
This is even more true for single mom’s. Can I get an amen?
While your friends and family members are able to share the burden of a child, you are in a completely different situation and may find yourself asking tough questions. There are many questions that new moms, such as yourself, will face; but few will be bigger than the question of money. More specifically, how much money you’ll need to raise your child.
The US Department of Agriculture has projected that most middle-class families will spend approximately $233,610 raising a child from birth to age 17. It’s a crazy number, but don’t let this six-figure price-tag send you into a tizzy! The truth is that while preparing for a baby certainly does take meticulous financial planning, you have a lot of time after your baby arrives to ease the financial transition into parenthood. That being said, there’s still a lot you can do before your baby’s arrival.
In fact, the biggest financial goals as a new mom should be set before your baby arrives! Once your child has entered the picture, your life will be filled with 3 AM feedings and diaper changes every dot on the hour! So it’s vital that you begin your preparations before delivery.
The first thing to pay attention to is health insurance.
Not all coverage is equal and it’s important to research how much your insurance will cover during delivery, baby check-ups, and pediatrician visits. Here are some questions to ask your healthcare provider: What is your deductible? Does your policy cover additional providers at the hospital (such as the anesthesiologist on staff)? How do you add your baby to your health insurance plan? What specifically is covered under your policy’s prenatal care? Does your policy cover a home birth or midwife services? Does your policy cover breast pumps and lactation consultants?
Of course, this is just a starting point and you’ll need to coordinate with your health care provider for more details.
In addition to health insurance, some other things that you should pay attention to before your baby’s arrival include:
- Making a parental leave plan
- Updating your household budget
- Planning ahead for childcare
Some employees may provide paid or partially paid parental leave. It’s vital to speak with your employer ahead of time to figure out how long your maternity leave extends.
It’s also important to update your household budget with baby supplies. Plan out how much money you’ll need to spend on your baby’s clothes, food, diapers, etc. and try to stay within this allocated budget. Lastly, for most American families, the biggest new cost to allocate for is child care. Come up with a plan ahead of time and depending on your budget and options, look into daycare if necessary.
These are just a few ways to prepare financially before your baby arrives. After delivery, you can move to the next steps of financial planning.
- One of the first items on this list would be to allocate money to an “emergency fund”. No matter how good you are with budgeting, it’s impossible to predict every expense that will pop up with your new baby. You can’t account for things such as emergency ER visits, extra trips to the pediatrician, babysitting needs, etc. Creating a fund for emergency purposes is the best way to avoid stress and hassle further down the line.
- It’s equally important to plan for the future as it is to plan for emergencies. Part of planning for the future includes setting up your child’s college fund as soon as possible. While it’s impossible to think of sending your baby to college at a time when he/she can’t even walk, it’s a future goal that you should constantly be working towards and adding money into! So that when the time comes for your child to go to college, they’re able to leave with as little financial pressure as possible.
While this list is not exhaustive, it does cover the big-ticket items that you may not think of! I hope it helps you plan better for you and your little one, and I hope it puts some of worries at ease.
If you’re a new mom or a mom-to-be, comment below on your biggest financial worries or questions! We’d love to hear from you.
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