Having A Baby

Before trying to conceive or adopting, review your healthcare options to ensure you’re adequately covered. Both you and your partner should reach out to your human resources department and take advantage of open enrollment to sign up for the right coverage if applicable.

If you are or hope to get pregnant, take a look at your healthcare benefits to find out what tests, appointments, screenings, etc. are covered under your plan. You may also ask your human resources department or benefits provider if they can help you better understand your coverage.

Questions to research:

• What does your healthcare plan cover? Is there a copay or a deductible?
• Is your doctor in- or out-of-network?
• Do you have to pay per appointment or a flat fee? If there’s a deductible, what percentage of the costs are covered once you meet it?
• Does your plan have an out-of-pocket maximum?

If you’re employed, talk with your benefits provider about your company’s family leave policy. Some may offer paid time while others may not.

Under the Family and Medical Leave Act (FMLA), most employees are eligible for up to twelve weeks of unpaid time for birth or adoption.

You’ll also want to ask about using sick time and/or vacation days. Additionally, you may be able to use Short-Term Disability coverage for your time off after birth or adoption.

Now that you’re going to add a dependent, you’ll want to make sure your child, partner, and/or loved ones are taken care of if something should happen to you. Life insurance can act as a replacement income for your family.

First, check with your employer to see if they offer life insurance, find out the cost, and determine if it’s enough to meet your family’s needs. If it’s not an option or doesn’t meet your needs, seek life insurance elsewhere.

In Texas, a two-income household can expect to pay about 10-12% of their income on center-based childcare. Single parents pay a much higher percentage of their income on childcare.

Begin researching childcare options and costs if you and/or your partner are planning to return to work after welcoming your little one. Start asking for recommendations, reading up on different facilities, and calling for prices.

Options to research:

• Relative
• In-home daycare
• Daycare center
• Live-in nanny/part-time nanny

You’ll need to select the option that works for you. You may find that a combination of the above options works best.

When a parent decides to stay home, that can sometimes mean leaving a job and the income that comes with it. Look at the numbers; it’s best to first determine how much the total income loss will be.

If you’re unable to live on one income, there are several options available to you to bring in extra income – such as taking part-time or freelance work, getting paid to take surveys, delivering groceries, etc. The plus side of many of these options is that you can make your own schedule.

Next, you’ll need to evaluate your expenses to make sure they don’t exceed your income.

Your first step is to get an accurate picture of everything you’re currently spending money on. This includes your housing, groceries, clothing, transportation, etc. Make a list of everything and then track your expenses for 1-2 months to verify your estimates.

Once you have all your expenses, identify the ones that will remain the same no matter if a parent stays home or continues working. For example, your mortgage or rent payment is likely to stay the same.

Now that you know where your money’s going, it’s time to examine how your expenses are going to change once you welcome the newest family member.

If you’re the parent who decides to stay home, you’ll need to think about how your expenses will change. While certain expenses will decrease, some will go up. You’ll also have to look at the long-term costs of not being employed.

Expenses That Could Decrease/Disappear:

• Childcare: the need to pay for regular childcare disappears. This isn’t to say that you’ll never need a babysitter, but rather you won’t have to worry about paying thousands every month.
• Transportation: one less person commuting to work could equal savings in gas, repairs, and insurance. If the car is no longer being used to commute, call your insurance company to see if your rate will go down. Another possibility is going down to one vehicle to save even more.
• Work-Related: there may no longer be the same work-related expenses that existed before – things like going out to lunch regularly, buying work clothes, picking up food on the way home, etc. You may still have these expenses, but they’ll likely decrease.
• Taxes: one less income may push you into a lower tax bracket, which could reduce your overall tax liability.

Expenses That Could Increase:

• Utilities: staying at home during the day means the air conditioner/heat will run regularly throughout the day. You’ll also use water and electricity more frequently.
• Groceries: eating and cooking at home more means paying extra for groceries, but this will likely lead to lower dining out expenses.
• Child-Related: you now have another person in your household that requires additional food, clothing, and items to survive. Things like diapers, formula, clothing, and more are all new expenses that you might need to add into your new budget.

In addition to the current impact, you and your partner need to consider the long-term costs, benefits, and consequences.

• Retirement: not working for a long period of time can have a significant impact on your ability to save money for retirement. Without a job, you’re no longer eligible for an employer-sponsored retirement account or any employer contributions that may have come with it. You’ll also need to be aware of how many credits you’ve earned in order to qualify for Social Security benefits.
• Employability: if the parent staying home does eventually plan to go back to work, you’ll also need to consider the potential loss in employability when returning to the job market. Many parents re-entering the workforce have to start at a lower paying job or even in a different industry than where they were before.
• Divorce: while no one wants to think that they’ll get divorced, it does happen. If it does, the partner that stayed home with the kid(s) may have it much harder financially.