3 Reasons to Boost Your Emergency Fund if You're Having a Baby

Having a baby is an incredible experience, but it's one you need to prepare for mentally, logistically, and financially. If you're having a baby, it's important to give your emergency fund a boost before your little one arrives. Here's why.

1. Your leave might be unpaid

The Family and Medical Leave Act (FMLA) entitles certain workers to 12 weeks of leave for the birth of a child during which time their jobs are protected. But that law doesn't require your employer to pay you. Depending on your company's policy, you could end up going without a paycheck for some or all of that time, so it's best to give your savings account balance a boost so you don't struggle.

Of course, what you should really do is sit down with your employer ahead of time and see what pay, if any, you're entitled to. You may be eligible for some sort of payment if you have short-term disability insurance through work. Get all of the details so there are no surprises later.

2. Daycare could cost a fortune

If you're planning to return to work after having a baby, you may need to pay for daycare if you don't have a family member who can look after your little one. But the cost of daycare today might shock you.

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Care.com reports that U.S. daycares charge an average of $284 a week. And that could easily eat up a large chunk of your paycheck.

Now, you may be thinking you can avoid paying for daycare if you happen to work from home. But most people who work full time can't manage an infant and a job. After all, how's it going to look if you're supposed to be in a Zoom meeting but there's a crying baby in the background?

3. You might face your share of healthcare bills

Even if you have good health insurance, having a baby won't necessarily be free. The Kaiser Family Foundation reports that the average out-of-pocket cost for women to deliver a baby in a hospital is $2,854 among those enrolled in large group health plans. But your costs may be higher or lower depending on your specific insurance coverage and the type of birth you have.

But it's not just healthcare bills related to your delivery you need to think about. You might also face your share of medical bills during your baby's first few months of life. So it's important to make sure you're equipped to cover them.

How much emergency savings should you aim for?

When it comes to emergency savings, the general convention is that it's wise to sock away enough money in the bank to cover three full months of essential bills at a minimum. But if you're having a baby, it's a good idea to save beyond that if possible.

Remember, too, that baby gear isn't cheap. You may get some items gifted to you if someone throws you a shower and your friends are generous. But you'll need a host of supplies, from furniture to car seats to strollers, not to mention clothing and a steady supply of diapers. So for all of these reasons, it's a good idea to pad your savings prior to having a baby if that's something you can swing.