Baby on the Way? Get Financially Prepared

Getting ready for the arrival of a child is an exciting time. Along with preparing for the costs of clothes, furniture, and baby items, take time to review your health care and employer benefits and policies relating to time off from work.

Spread the costs

Compile a list of anticipated expenses—including doctor fees, maternity clothes, birthing classes, unpaid time off for maternity or paternity leave, and necessities for the baby—and calculate the total.

Distribute the total cost throughout the duration of your pregnancy. If you pay as you go rather than purchase everything at once, the sum becomes easier to manage ($4,000 divided by nine months is $445 per month).

Know what’s covered

Health care plans vary widely and while a friend may have had all the expenses paid for, not all insurance plans are alike. Know what you will be responsible for and when payments are due.

By appointment or flat fee? A nine-month pregnancy typically involves at least a dozen checkups. Talk to your doctor about how your visits and delivery will be billed. Ask if there will be a flat fee for all appointments and the delivery, or if you’ll be charged separately for each.

What’s not covered? Call your insurance company and research what pregnancy care costs will be covered. Ask about co-pays, co-insurance, deductibles, out-of-pocket costs, birthing and other classes, and specialty tests.

Alternative deliveries. Cesarean section, a far more expensive procedure than other deliveries, accounts for one-third of all U.S. births. Discuss with your doctor and your insurance company how costs change if you require a C-section or any other additional hospitalization.

Medical savings. If you participate in a flexible spending account (FSA) or health savings account (HSA), increase your contributions, or save on your own to cover expenses not covered by insurance.

Paying the bills. Decide how you will pay for medical expenses. Will your medical savings cover some of the costs? Will you use a portion of your emergency or other savings? See these related tips on how to pay for health care.

Employment considerations

Your pregnancy and the birth of your child will surely affect your work life for a while, and that can impact your finances. Consider the following:

Maternity benefits. Look into maternity and paternity leave. Learn about additional unpaid time off under the Family and Medical Leave Act . Be aware that if your company has fewer than 50 employees, it’s not required to offer FMLA leave. Find out what the company pays and be prepared to plan for any unpaid days off.

Sick days. Ask your employer if you can use unused sick and vacation days to cover your maternity leave. If those are paid days, you’ll have some money coming in during your leave.

Doctor’s appointments. Don’t forget to calculate any lost pay if you’ll need unpaid time off for doctor’s appointments.

Part-time work. Some new parents find that they are able to work part time. If your employer doesn’t offer maternity or paternity leave, see if you can arrange to work part time, possibly from home.