Anyone even thinking about having kids may wonder whether they've turned into some kind of bipolar monster, cooing over passing infants in strollers one minute, then freaking out over the outrageous cost of college the next.
Believe it or not, this behavior's pretty normal. Contemplating parenthood means taking on a pile of new responsibilities that can throw you into a tailspin, forcing you to think about wills and life insurance and pacifiers all at once.
To make this life-changing transition a little smoother, you might consider doing some early financial planning for the topsy-turvy time from pregnancy through early infanthood. Start while the little tyke is just a twinkle in your eye, because you can't predict how fast "trying" will turn into "expecting." Wait too long, and you may be too saddled by morning sickness to do much more than watch terrible television and eat soda crackers. Or the other parent may be too busy picking up some extra household duties.
With that in mind, there are some things you can do ahead of time to help you prepare:
Find out about your employer's parental leave policies. And don't be surprised if they're unpaid -- even if you're the mother. If you're the father, many companies must follow family policies that give you the right to take some time off, too. If both of you want to take some quality time at home, you'll need to factor that into your planning.
Investigate the coverage offered by your health insurance. Maternity policies often differ from those for routine office visits or emergency coverage. You may be asked to pay a larger share of the costs. Try to estimate how much you'll have to pay, and start saving that money now. Factor your deductible into that equation. You're almost certainly going to have to pay the entire amount. While you're investigating all these details, find out how quickly you have to call the insurance company to make sure the new arrival gets coverage, too.
Save by setting aside some money in a flexible savings account. Those accounts, offered by some employers, allow employees to put aside money before paying taxes to cover health and medical costs. After you pay your expenses, you request reimbursement. The arrangement basically allows you to pay your health expenses with untaxed dollars, saving you money in taxes.
Make sure to check your employer's policies. Some health spending accounts may deny reimbursements from expenses you accrue while you're on leave. If that's the case, save a larger chunk of money in an account held by the spouse who will spend the least time away from work.
While you're at it, start saving a little money for all the additional expenses that may or may not be covered by your insurance. That includes birthing classes, infant care classes, baby CPR classes ... you may be asked to get a virtual bachelor's degree in babies.
Think about how to pay the bills while you're not working. You might decide you want to leave work, whether temporarily or permanently. If you take a temporary, unpaid leave, that may mean stashing enough money away early to make sure the mortgage or rent and any necessary expenses can get paid while you're not working. If you want to leave work for the long term, try living on one salary for a while. You'll get an immediate idea about the lifestyle changes you'll have to make.
In either case, you might want to start scouring the budget now for any extra expenses you can do without once the baby -- and all of the demands for diapers, formula, and pediatric visits -- arrives. Try living without those luxuries now. It will make it easier to stash away some money for your future costs and ease you into a lifestyle for three.
Lastly, don't turn down anything that anyone offers you -- and they will offer. Maternity wear, baby clothes, cribs, and other items get shuttled from one household to the next in a kind of underground parents' economy. Accept the freebies, even those tent-sized T-shirts that look like they came from Jabba the Hutt. You may need them one day.
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