I'm Having a Second Child in 2022. Here's How I'm Preparing Financially

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  • Having a child imposes new costs and obligations.
  • A new baby may mean reworking your budget.
  • There are other important financial steps to take to prepare for a new baby.

Could these steps be the right ones for you if you're expecting?

In March, my husband and I are planning to welcome a second (and final) child to our family. As anyone who has ever had a child, or considered having one, can tell you, a baby changes life in profound ways. Some of those changes have to do with your finances.

When my son was born in 2019, I tried to be prepared as much as possible for his birth, but as a new parent there were still financial surprises. This time, I'm more aware of how my money situation may change, so I've decided to take these four financial steps to prepare financially for the upcoming birth of my daughter.

1. Saving money for after the birth

As a freelance writer, I do not get paid maternity leave when I have a baby -- although my clients are extremely understanding about allowing me to take time off as long as I need.

My birth with my son was simple and my son was an easy baby, so I was actually back to writing within days of the time he was born. I work from home and it's easy and I would have been bored otherwise. But there's no guarantee this will happen with my daughter.

As a result, I'm saving money for after the birth in case I need or want to take more time off or cut back from my work obligations temporarily. Saving up funds for after a birth can be important for everyone, even those who do get paid time off, as you never know what unexpected events will arise you need to be prepared for.

2. Changing my insurance coverage

Having a baby can be expensive, even under the best of circumstances. I had a home birth and the cost of the birth and the aftercare for me and my son still totaled several thousand dollars even with insurance.

In order to keep my costs down as much as possible, I changed insurance at the start of this year. I decided it was worth paying more for a policy with a lower deductible and lower out-of-pocket limit since it is guaranteed I'll be using medical services during the course of the year when my daughter is born.

Typically, you can change health insurance only during specific times of the year called open enrollment. If you know you'll be having a baby soon when your open enrollment period rolls around, it's worth taking this opportunity to get more comprehensive coverage in place if you can.

3. Reworking my budget

A new child is going to inevitably add costs, as I'll have more diapers to buy and more activities to pay for as she gets a little older.

I'm reworking my budget in advance to prepare for these added expenditures so I can get used to living on a different budget before my life changes profoundly.

By planning for the new costs I'll have to pay, I can also make sure I don't end up reaching for the credit cards when these additional expenditures arise.

4. Buying more life insurance

Finally, I'm purchasing more life insurance in order to make sure my daughter's needs can be provided for even if something happens to me. I already have a policy in place, but the costs of raising and educating a second child are substantial and I don't want either my son or daughter to be short-changed if the worst occurs.

Taking these four steps has helped me to avoid worrying about whether I'll be ready to deal with the financial aspects of having a second child and focus instead on more important things like preparing for more sleepless nights.

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