Money·7 min read

When Two Becomes Three or Four

Baby crib or puppy sleeping_when two becomes three or four article
Sep 16, 2019

The Story

The birds...the bees...the bills. Whether you’re flying solo or have a plus one, “the talk” is inevitable. Because planning for a baby can start way before you’re actually ready to grow your family. Same goes for a fur baby (hiii, 67% of Skimm’rs who are thinking about getting a pet in the next couple of years).

I wasn’t born yesterday, you know.

Ba dum tss. But even if this stuff isn’t on your radar right this second, the future can still spell family, whatever that means to you.

True. Let’s get down to business.

Good, because babies equal bills. Plain and simple. Here's how to get your financial house in order before you're knee-deep in the parenting trenches.

A (financial) star is born. 

Humans first. The cost of raising a baby (from birth to age 18) can run up to $233,610. So it pays to plan ahead. Here are some things to consider if you’re looking to grow your family:  

For when you’re estimating medical costs...

Having a baby is expensive even with health insurance. Do your homework on the anticipated costs of medical bills. Reach out to your insurance company to get a firm grasp of what’s covered under your plan – from prenatal care through delivery. And which hospitals and providers are in-network.

You’ll also want to get clear on any deductibles and copays you might be on the hook for, and ask for a ballpark estimate of how much your delivery will cost you.

For when you’re planning for parental leave...

Parental leave is something the U.S. isn't exactly winning any awards for. (We're the only developed nation that doesn't require some form of paid leave.) Step one is to figure out if your state mandates or offers partially paid parental leave. California, New Jersey, New York, and Rhode Island do, and fund programs through payroll taxes. Step two is to determine how much of your income leave will replace. It varies based on program, but the current range is somewhere between 50% and 90%.If you are covered by parental leave at work, make sure you don’t take it without asking some questions first: 

  • What’s the maximum amount of paid leave I am eligible for? Is this the same as my FMLA time off? Hint: FMLA is shorthand for the Family and Medical Leave Act, which protects your job for up to 12 weeks after having a baby. The catch is that it’s unpaid and you have to work for a company that has at least 50 employees. You can check out the other requirements here

  • How much will I get paid? And for how long? 

  • If I need to take time off before the baby arrives for medical reasons, how will those days be considered? Will they be PTO or will they take away from my leave time? 

  • Will contributions to my retirement or flex spending accounts continue while I am on leave? Will I continue to accrue sick days?

  • What are the company policies on short-term disability? What happens if I need extended time off due to medical reasons?

  • What is the process of adding my child to our medical coverage?

Whether you're self-employed or just stuck with crappy benefits, you may be cornered into unpaid leave. A well-stocked savings account can come to the rescue. If you're a long way from starting a family, kicking in just a little bit each paycheck will add up over time.

For when you’re bringing up baby…

Once you know how much you’ll be spending on medical costs and how much income you’ll be missing out on, you can back into a baby budget. It helps to break out the known and the unknown costs:

  • Known: You’ve got your one-off costs (think: crib, stroller) and your continued costs (think: clothes, diapers, food). Keep some of these in check with hand-me-downs, buying second hand, or putting the essentials on your baby shower gift list. 

  • Unknown: Babies are cute and unpredictable, so take a second look at your emergency fund. Odds are, you’ll want to bulk it up. It’s impossible to predict exactly how much you’ll need, but the average cost of raising a child is close to $13,000 per year. This includes food, shelter, and other necessities — but not the unexpected stuff. 

  • Childcare: Deserves its own bullet. In almost half of two-parent households, both parents are working full time. Meaning, most people have to make arrangements for childcare. How much you'll shell out depends on what your needs are and where you live, but the average cost comes in at about $844 per month. Hi, second housing payment. Check with your employer to see if they're willing to help out — some companies offer special types of flexible spending accounts (FSAs) that exclusively allow you to pay for childcare using pre-tax dollars. 

Wah. Anything else?

Ok, nobody likes to think about their own mortality, but life insurance becomes crazy important once you're a parent. If something were to happen to you, would your partner and kids be in a bind? The situation can be even scarier for single parents. But don’t freak out. A strong life insurance policy ensures that your beneficiaries will be well taken care of should the unthinkable happen. Psst...John Hancock has great options that might be right for you. 

What to expect when you’re expecting something a little furrier...

The first-year cost of pet ownership can be anywhere from $1,400-4,300. And that’s just for basic supplies, food, and vet care. Here are some ways to prep your bank account for your best friend...

For year one:

  • Adoption fees vs. breeder fees. This one’s a biggie. While adopting from a rescue or shelter will only cost you around $50 to $200, the average bill jumps up to $500 to $2,000 if you go through a breeder. No judgment, we’re just saying.

  • Puppy/kitten medical bills. Little ones need to visit the vet for vaccines every few weeks until 16 weeks of age. Add to that medication like heartworm, flea and tick prevention, plus spay or neuter fees. Insert: a longer than anticipated receipt. 

  • Ask about puppy parental leave. You read that right. More and more companies are offering “pawternity leave” to allow employees to bond with their new pets. 

For years to come: 

  • Estimate your yearly budget for known costs. These can include: 

    • Food, treats, and toys

    • Routine vet care/bills: checkups 1-2x a year, annual lab work, dental cleanings, preventative meds (heartworm, flea, etc)  

    • Grooming

    • Pet insurance: signing up can magically reduce your out-of-pocket pet care costs. Especially since a run-of-the-mill surprise medical bill can set you back anywhere from $800 to $1,500. Monthly premiums vary, but the average plan lands at around $28 for cats; $45 for doggos.

  • Unknowns, like: 

    • Training/behavioral issues: your pet may have anxiety, be aggressive with other animals or kids, or just need some help getting housebroken. Training sessions can cost anywhere from $30 to $2,500 (a wide range, we know), depending on what’s needed and the level of training you’re going for. 

    • Pet sitter/boarding: monthly daycare for your four-legged family members can run somewhere in the neighborhood of $240 to $550. 

Woof. That’s a lot.

Don’t panic. Enlisting a financial advisor to help with the heavy lifting can take the pressure off and layout a plan for getting there. Insert, John Hancock. They can help build a financial plan that's customized to your needs, baby or dog breath included. 


Unless you have a crystal ball, there's no way to know exactly how the future will unfold. But it never hurts to start prepping your finances sooner rather than later. With enough planning, the kids will be alright. 

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