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).
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.
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.
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:
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.
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:
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.
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:
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.
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...
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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