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One Mom’s Tips to Financially Prepare for a Baby

  October 24

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7308405302_8f3fe3d9cfBy the time you read this, I will be on a plane heading back to the States for good.

The 2+ years that I spent living in the Caribbean are now over. I’m sad. So sad.

Yet, at the same time, I knew this journey had to come to an end. That was the deal when we signed up for it. I know it was the right decision to head back a little early to make sure our twins are in good hands, but gosh I hope I get to see Grenada again sooner rather than later…

Since I am away today and unable to answer comments, my friend Jaclyn is guest posting about her little bundle of joy! I’m so excited to welcome a fellow mama-to-be to the site. Jaclyn is a graduate of the University of Florida and works full time in the financial services industry. Her blog, Debt Free Dreaming chronicles her and her husband’s journey to becoming debt free.

Take it away, Jaclyn!

In T minus 71 days and counting (depending on how stubborn our little one decides to be), my husband and I will be having our first baby. That’s right – our little girl (who we’ve decided to name Mia) is due on Christmas Day.

As first-time parents, this year has been a whirlwind trying to mentally and financially prepare for our little bundle of joy. And most would argue that we’re CRAZY for starting a family now, while we have a little over $44,000 in debt.

They’re probably right. So my husband and I have been doing our best to take the right steps in preparing for little Mia. Hopefully these tips will help any of you other expecting parents.

The first thing we did was join an OB with a global maternity program. A global what? That’s basically their fancy way of saying: here’s what our fee will be to deliver the baby and you need to pay it up front. I panicked at our first appointment when they told us this. $2,250 is their fee. So, for 6 months my husband and I paid $375 towards the fee. Talk about a stressor – that’s like having an extra car payment! Alas, we made it through, and I’m happy to report that we made our last payment two weeks ago! What’s great about this is that the $2,250 will go towards my deductible leaving us with just $250 that we should have to pay out of pocket afterward. Knowing that we won’t have a large medical bill hanging over our heads after Mia is here is a HUGE relief!

So, for all you expecting parents, I highly recommend joining an OB with this kind of program, or at least saving for your medical expenses ahead of time. The relief you will feel afterward will be worth it!

The second thing we did was try to increase our income. The hubby works overtime whenever he can and tries to make the most of that money. In addition, I’ve started doing some freelance work on the side, and we’ve even started selling things we don’t need anymore. We sold Disney tickets for $350, our DVD collection for $325 and some smaller items too. In one month we got $800 from what we sold. It really adds up!!

The third thing we’ve done is STOPPED paying off our debt. Now hold on, put your pitch forks away for a minute! We are, of course, still making minimum payments on all of our debts. However, until Mia is born and our expenses stabilize, we decided to stop aggressively paying off debt and to save as much as we can instead. Inevitably, we will have big-ticket items like a car seat to purchase and other unexpected expenses to prepare for, and we want to be ready for it.

We estimate that we’ll have about $6,000 in savings by Christmas. Between that and having medical expenses covered, we’re feeling pretty good about where we are.

And the great news is that if we don’t need the money, we can leave a specific amount set aside as our emergency fund, and we can use the rest to start aggressively paying off debt again!

Editor’s Note: The hubs and I have also halted extra debt payments until we get our kiddos into the world safely and move across the country. Like Jaclyn, we wanted to have as much money saved as possible and will go right back to aggressively paying off debt once we get used to our new normal of life with kids.

What are you doing or what did you do to financially prepare for your little one?

Photo by Adrian DreBler

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20 responses to “One Mom’s Tips to Financially Prepare for a Baby

  1. Congrats Jaclyn on the baby. Our son was due a few days before Christmas and he ended up coming on the 27th. I think you are doing exactly what you are supposed to be doing. It is hard to prepare for a child because it is so life changing. You are starting the right way. I wish you the best on the delivery of your daughter!

    1. Thanks Grayson! You’re right, as a first-time parent, it’s like taking a shot in the dark trying to prepare for her. I just hope she comes this year (can you say tax deduction? lol)

  2. That is absolutely wonderful and very commendable. When we had our daughter back in 2010, we had to pay all of our ob fees up front (the practice required it). Luckily for us, the rest of the remaining bills were from the hospital and labs of some sort, but I think after we had her we only paid around $600, which was a huge relief. Congrats on your bundle of joy Cat and Jaclyn.

  3. Congrats on the baby! We went for a similar program that told us the total costs an we only had to pay half of that when we signed the contract and the other half after delivery. Knowing how much we had to pay was indeed helpful. We also started saving for this before wifey even got pregnant, so we were all set – in today’s world, being ready with some extra money is the best approach to pregnancy.

    1. Good idea on saving before your wife was even pregnant. I’m glad we’ll have a little bit of cushion for any unexpected expenses that come up.

  4. Congratulations 🙂

    We have started saving for the upcoming birth (somewhere in February, if our little one is not rushing ‘outside’) since I’ll be having her in a private clinic in my country (the state hospitals are horrible). We have also spent quite a lot on the stuff we need, but we’re pretty prepared now. So we’ll just focus on saving and dealing with anything that comes our way.

    Good plan you have, best of luck with the pregnancy and birth 😉

  5. I like this approach a lot. I think you’re spot on to focus first on making sure you have cash to support the baby and take the debt payment a little slower for a while. On a more morbid note, I would absolutely make sure you get life insurance and wills in place as soon as you can. Those two things are pretty essential for new parents. Good luck!

  6. I think it makes a lot of sense to stop paying off your debt, or at least not contributing additional funds. It’s more important for you to hoard cash at this point. Definitely agree with that one and also is something I’ve been doing to build up a bigger emergency fund.

  7. When I quit my job without a real plan in place, I also stopped paying on my debt as well. This is a good way to get some cash, quick. Granted, I only had 2 weeks and saved only $2000 but it was enough…

  8. Jaclyn, I think you guys have a great plan in place!! Having your first baby is a huge learning experience, and you guys are taking the right steps so that money will not be a stressor and you can focus on your little Mia. Excellent work, and huge congrats to you!

  9. Congratulations! I really love all of these tips. We are definitely going to share them with some of our clients later in the week. Be sure to also look into some life insurance. The birth of a child is one of the most common events which trigger someone to purchase life insurance.

  10. Congrats on the Baby! We had a baby a few months ago, and luckily had health insurance that covered most of the medical costs. I have a good amount of student loan debt but they are at a low interest rate. While paying off debt is important, I think it is even more important to have some cash on hand to prepare for a baby.

  11. Kids are expensive and it’s best to be able to pay for their expenses in cash as opposed to incurring more debt! It’s always smart to not aggressively pay debt when preparing for a kid. Great advice!

  12. I’m so happy for you Cat! I’m sure that plane ride is bittersweet!

    I turned into a crazy hoarder when I was pregnant. With my second child, I had an entire closet filled with toilet paper because I felt like we could run out. I was definitely over-prepared for both of my children.

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