Financial Must-Dos Before Baby

There are a lot of financial changes that come along with having a baby. It’s important to analyze your finances before your baby comes or even before pregnancy in order to best prepare for this life change.  

You want to know the costs of having a baby to make sure you will be ready to support your whole family, and luckily, you have 9 months to plan ahead.

It’s important to know what additional expenses you will be incurring, as well as ways to save money. As much as there are additional costs incurred with having a child, there are also tax advantages in which you will get more money back for the expenses you pay to have a child.

Financially prepare for your baby

Here are some important must-dos and how to best financially prepare yourself for the new baby.

Get to know your health insurance policy

This is a big one that most people don’t know and could incur you a hefty expense if you’re not careful and do our homework.

Confirm your providers are in-network

Make sure all your maternity and delivery expenses will be covered, including ultrasounds, labs, and prenatal visits. Confirm and then double confirm your insurance is accepted at your OB/GYN, maternal/fetal medicine (if you are referred there for ultrasounds), hospital, labs, as well as pediatrician.

Don’t assume that because your OB takes your insurance, that the ultrasound tech, blood labs, and other specialists do too.  Your insurance is your responsibility and the doctors and receptionists are not looking out for you.  

They all are billed separately so be sure they are accepted by your insurance.  Even if your OB accepts your insurance, that doesn’t mean the lab or ultrasound technician that they send you to does.  You don’t want to end up with bills for $900 and trust me, it happens.

After my delivery, I found out the anesthesiologist (for epidural), hospital OB, pediatrician, and hospital stay are all separate bills and they all accept different insurances.

Luckily, I had my husband’s insurance as a secondary so they covered the $300 I would have had to pay because my insurance was not in-network for the anesthesiologist. A friend of mine was also billed $2000 for ultrasounds that she was sent out for, not knowing  they didn’t accept it.

If you have a primary and secondary insurance, make sure all your providers have both policies on file and that they are submitting your bills to BOTH insurances. A secondary insurance will even cover your copays that the primary insurance doesn’t cover.


Find out about out-of-pocket expenses, including copays and deductibles

Don’t just assume that your insurance will be covering all of your prenatal expenses. Find out how much you will be paying out-of-pocket for the delivery and prenatal care.  

Under most insurance policies the majority of your hospital visit is covered, but you could still have a pretty large copay. You may also have to meet a high deductible before your insurance kicks in to pay anything.

Related Post: What to Pack in Your Hospital Delivery Bag

Order your free breast pump

Now, most health insurances will cover the cost of a breast pump 100%. They can be pricey so this is very valuable! Check out Aeroflow Breastpumps to check whether you qualify through insurance. They make it so easy to determine your eligibility and contact the insurance and physician directly. Aeroflow then takes care of all the required paperwork between the supplier and your doctor and gets the pump sent right to you for no cost at all!

Check for additional incentives through your policy

Some policies also offer additional incentives during pregnancy besides the pump, but you have to call and ask.  Mine sends 150 free breast milk storage bags every 30 days and sent me a pregnancy gift bag with some good products. Other insurances I have heard will pay for childbirth classes, give out gift cards, and other pregnancy or baby-related products.

Confirm Your Work Maternity Leave

If you will need to take time off of work, figure out exactly how long you will be paid for and how long you can afford to take off with out pay, if necessary. Some companies offer a generous paid maternity/paternity leave, but many do not.  

Even if your company does, it can be confusing as to how you will be paid during this time.  

Make sure you look into exactly how many weeks you will get, whether you will need to take out short term disability insurance, use sick or vacation time, or if your company just gives you the paid time off. It’s important to understand their policy so you’re not stressed after the baby is born with how you will be paid.

Budget How Much You Will be Spending After Baby Comes

To the best of your ability, figure out how much you can afford to increase your spending from your current income.  Childcare will be your largest expense and with the added costs of just formula, diapers, and wipes, your budget will need to increase a hefty amount.

Related Post: How to Organize Your Home Before Bringing Home the New Baby

Important financial things you need to know during pregnancy and before your baby comes. Don't be caught surprised when the bills come in.

Start an Emergency Fund

If you don’t already have at least 2 months of living expenses saved up, you should definitely start that now.  Kids are unpredictable and you never know when you’ll need some extra cash for an unexpected expense like a hospital visit or taking time off work.

If you will be taking unpaid maternity or paternity leave, also start saving for this as well.

Related Post: Biggest Fears During Pregnancy and Why You Should Stop Worrying

Begin Stocking up on Baby Items

If you see good deals on diapers and baby gear, don’t hesitate to stockpile. It’s estimated you will use about 3,000 diapers in baby’s first year, so they’ll never go to waste!  

Make sure you figure out if someone is throwing you a baby shower and how many items you think you will receive as gifts or what you will need to buy yourself.  

This way you can spread out the costs for baby over a longer period of time.  Check out my post on The Ultimate Baby Registry Guide to see what items you will need to purchase.

The Amazon Family Subscribe and Save option has been my favorite choice for the best deals to stock up on baby supplies. If you order 5 or more items in 1 month period, you automatically get 20% off. There’s usually coupons you can use for diapers, formula, wipes, etc. This can save you a hefty amount on these staple items if you shop smart and compare the prices.

The Amazon Baby Registry also gives you a 10% completion discount so you can use that for all your future baby needs (which really add up)!

Start Saving for College

If you really want to get a head start in saving for your baby’s future, you can open a 529 Account in their name. A 529 account is a college savings/investment account for your child.  

If you choose to put money away for your child’s future, that money will be invested and grow for the next 18 years and hopefully be a great way to help them down the road when paying for school.

There are many options to choose from, but what’s most important is to check if your state offers tax incentives to invest in their plan.  If they do, your total taxable income will be decreased for the amount of money you invest into the 529 account, if you work in that state.

If your state doesn’t offer these incentives, it may not be as helpful for you to open up this kind of account.  If so, maybe a savings account or even your own retirement plan may be a more beneficial investment, but look into all of your options.  Check this website to see if your state offers the tax deductions.

Life or Disability Insurance

If you haven’t done so already, it’s a wise decision to invest in a life insurance policy for the head of household.  There are different types of policies that you can look into, but you want your family to be taken care of in the event of an unforeseen death or disability.

Having a baby now means that you have a family relying on your financial support, so it’s just best to be prepared.


Know the Financial Benefits

Child Tax Credit for Adding a Dependent

If your income as a married couple is less than $400,000, you would qualify for $2,000 back on your taxes, per child! This is a tax credit which is a dollar-for-dollar give back in your taxes instead of just a reduction of your income.

Related Post: 33 Things Every New Mom Should Know About Childbirth

Tax-free Childcare Expenses

Look into if your employer offers a FSA (Flexible Spending Account) or Dependent Care Account and if they do, contribute to it!  This allows you to put away money from each paycheck into a small account that is then used as a tax free way to pay for daycare or childcare expenses.

This could save you 20-30% off of childcare costs! Also, if you’re a military family, you get a large discount on daycare expenses so make sure you look into that.

Tax-free Healthcare Expenses

Also, if your employers lets you contribute to an HSA (Health Savings Account), that you can use to cover health care expenses related to pregnancy and your child, as well.  

You can submit receipts for all your copays and other pregnancy related costs, such as pregnancy tests, fertility monitors, prenatal vitamins, acupuncture, prescriptions, childbirth classes, etc.

With the additional healthcare costs you should definitely max out this account. You will be reimbursed for all of those medical expenses tax-free, which can also save you 20-30% on these costs.  You are also able to carry over a portion of money that you didn’t use to the following year if necessary.

. . . . .

Hopefully this helps clear up some of your financial worries or questions when having a baby. Make sure you do all of these things in order to best financially prepare for your baby and family. 

Get financially prepared for your baby and growing family with this important tips. You don't want to be caught surprised with bills you didn't know about. There are also additional tax incentives to have a baby that you should know.
Important financial things you need to know during pregnancy and before your baby comes. Don't be caught surprised when the bills come in.
Scroll to Top