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Financial Preparations To Make For A New Baby

August 15, 2017 By Thinking of Someday

The age-old question – is there ever a right time to have a baby? I don’t know that there’s ever a right time per se, but there are definitely some times that are better than others. And there are many preparations that need to be made in preparing for a new baby. Financial preparations are an important part of them.

For us, we tried to make sure that we were in the best financial situation that we could be in without sacrificing having to wait so long to grow our family of two. In this post, I will discuss some of the things we did in regards to financial preparations to make for a new baby.

Budgeting

I can’t stress this single topic enough – Budget. Budget. BUDGET! We discuss personal finance a lot here on Thinking of Someday. Why? Because it affects all facets of your life, including family and having a baby. When people have a baby they want to give them the best of the best, even better than what they had coming up. So why not start your child’s life off on the right foot by being an example that they can follow on what to do financially?

That aside, since I am supposed to be talking about how budgeting helps to prepare financially for a new baby – Simply put, budgeting does help. It helped us because we were able to plan for and save for the items that we knew we were going to need. The same goes for some of the small items that people don’t typically buy as baby shower gifts. Budgeting also helped because it caused us to look at our overall financial picture at the time and start the discussion about how we were going to afford daycare or ways to avoid daycare. If we had not been budgeting at the time it probably would’ve been harder to see if we could or couldn’t truly afford daycare.

** side note: If you don’t have a budget template to use, you can get a free one by subscribing to our blog and you can check out How To Get Started With Doing A Zero-Based Budget to help you get started!

Budgeting does what budgeting always does – it allows you to be more efficient at pointing your money towards a certain goal. In this case, the goal is to save as much money as you can. Which leads us to the next financial preparation – stop paying off debt while pregnant.

Stop Paying Off Debt While Pregnant

When we found out I was pregnant we stopped paying extra towards my student loans (the only debt we had other than our house). Instead, we saved the money until after I had our child and everything was A-OK with baby and I. It was definitely tempting to pay extra on the student loans instead of slowing down on paying them off. However, we found it wise to save the money “just in case” and then after all was well we resumed paying off the debt.

If you aren’t already paying off debt, now isn’t the time to start. Instead of spending money on whatever you’re spending it on, focus on saving your money instead. Why? For the same reasons I give for not continuing to pay off debt if you are. Once your baby is born and both you and baby are A-OK… You might want to highly consider getting out of debt. And also put you some money aside for emergencies. When we were getting out of debt we had $2000 in our savings account in case of an emergency. Emergencies can happen at any time, especially if you have kids. If you cut back on unnecessary spending while you’re pregnant and save the money instead, then you should have a nice lump sum of money to help you get started with a mini emergency fund and your debt free journey.

Understand Your Health Insurance

Understanding your insurance is an important part of preparing for a new baby. To start with, you want to make sure you choose a provider who is considered in-network as this will help with your costs. Find out what’s expected from you in regards to your co-pays and deductible. This will also give you an idea of what your insurance provider contribution will be.

Once you’re at the hospital for delivery, unless it’s required beforehand, be prepared to also pay your hospital co-pay as well. This is what happened to us. Since I work at a hospital and Omar and I had already done our research about my insurance, I wasn’t surprised when someone came to my room to talk about my payment… And it wasn’t cheap! However, we were prepared.

Choosing Insurance For The New Baby
You’ll also need to decide if you’ll be adding your new bundle of joy to your insurance or your spouse’s insurance. Our son was under my insurance for delivery, but we added him to Omar’s for everything afterward. Once that’s decided, you’ll need to find out when exactly you should add your newborn to your or your spouse’s insurance because you don’t want any issues with delays (or insurance paying their part). And not to state the obvious, but find out how much it’ll cost. This might be the determining factor of who’s insurance the baby will be added to. And yet again you might have to take a look at your budget to see if you need to make any adjustments.

** side note: Don’t forget to research pediatricians before your baby is born. And of course be sure to choose someone who is in network.

If you and/or your spouse don’t have insurance, then definitely start looking into what options are available to you. Don’t wait until your baby is born as this can just cause added, unnecessary stress.

Plan For Maternity/Paternity Leave

If you’re welcoming a new baby into your life, surely you’re going to want some time off from work to enjoy your baby. And if you’re mom, you will also need this time off from work so that you can recover. If you’re dad, you’ll probably want some amount of time off from work, if possible, so that you can bond with your new baby. This will also be beneficial for being able to help mom with things she might need help with as well. Regardless, maternity and/or paternity leave are something that has to be planned for.

Short Term Disability / PTO / FMLA
For starters, do you have short term disability? How much will it cover and when does it kick in? If you don’t have it, is it possible to sign up for it prior to the baby being born? In our case, since we knew when we wanted to start trying to have a baby, I signed up for short term disability during open enrollment since that was in November for me and we were going to start trying the following January.

Now is also a good time to see if your job offers FMLA – you might be able to be off for up to 12 weeks, but you’ll have to use your vacation time / PTO to do so. So start saving up your PTO if possible because this can help to cover your bills while you stay home enjoying your new baby.

If dad wants to take some time off, find out if dad’s job offers any type of paternity leave or if he’ll have to use some vacation time or FMLA if that’s an option.

Planning for maternity/paternity leave by way of budgeting is a must. Even if you have short term disability it might not provide you with enough money to cover your regular bills and expenses, especially if you want to be off from work more than the typical 6 – 8 weeks that’s provided for having a newborn. Budgeting can help you figure out how much you need to be saving to cover your bills and expenses while you and/or your spouse are out of work.

Financial Preparations To Make For A New Baby – OUR STORY

Throughout this post, I’ve mentioned several instances of what we did and why we did it. What I didn’t do was go into detail about just how important it ended up being for us personally.

When we found out I was pregnant we were beyond excited and scared at the same time. Our family and friends were just as excited for us. I had a pretty good pregnancy with the exception of dealing with morning sickness for 8 months – Yes, 8 months! Luckily I got over it by then because someone I didn’t expect to get sick, did. Who was it? None other than my husband, Omar. I’ll let him share the story…

The Cloud Over Our Joyous Occasion
There I was sitting in the car crying as hard as I had cried in years. I had turned 30 earlier that year, Kim and I celebrated our first full year in the home we owned, and we had just brought our first child home a few weeks ago. Life was supposed to be good.

Instead, I was driving to the hospital to schedule a biopsy. During Kim’s last month of pregnancy, my temperature started shooting up to 102+ throughout the day. I was taking the max dosage of Tylenol and Motrin per day just to keep my temperature in check.

I had been to my primary care doctor several times, specialists, the emergency room when my temperature went over 104F and taken several tests. No one could tell me what was wrong with me. And of course, with the help of Dr. Google, we were already fearing the worse.

That’s when one of my doctors decided to schedule me for a biopsy because one of the lymph nodes under my neck was about the size of a large strawberry. And another specialist had already told me that it wasn’t mono (the kissing disease). So they prepared me for the possibility that it could be lymphoma (cancer).

The Biopsy & Results
So there I was in my car going to get pre-registered for my biopsy and wondering if I would get to see my son grow up and how Kim would handle my passing. Especially since she was already dealing with her dad being in hospice care.

 I was terrified of the results of the biopsy but part of me was okay with whatever happened. If I died my life insurance would be enough to pay the house off and leave Kim with enough to live off the interest of what she invested it in. Also, because we stopped paying off debt and saved as much as we could we had 22K in our emergency fund. We could fight through this with that much cash and health insurance.

As if things couldn’t get any worse, once I had my biopsy, my doctor talked to Kim afterward. Kim cut straight to the chase and asked, “Off the record, do you think it’s lymphoma?” With a deep sigh, he said, “Yes.” And then he went on to talk about how the success rate of the treatment was very good and he would do everything he could to help me feel well. He had such empathy for me as well because he and his wife had just had their first son too.

After waiting for what seemed like an eternity although it was only 2 days because my doctor had the results rushed… it turned out I didn’t have cancer (whew!), but instead some rare disease that had to run it’s course. However, I had a hefty sum of medical bills but an emergency fund large enough to cover it thankfully. I’m so glad we had that money there. It would have made a difficult situation even harder.

Final Thoughts

Although there are many preparations that need to be made in preparing for a newborn don’t forget about the financial aspect. Planning for the financial part of a new baby will help make the experience less stressful and more enjoyable.

What financial preparations are you making (or did you make) for your new baby?

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Filed Under: Life + Home Tagged With: life tips, newborn, parenting, zero-based budget

See what’s happening on Instagram…

thinkingofsomeday

No long caption. I just wanted to make our last “mortgage principal payoff” calendar update. 😆 It’s been a month and it still feels surreal to us...
On Christmas Eve morning, Omar left out of the bed On Christmas Eve morning, Omar left out of the bedroom saying that he had to go work on something. When he came back he handed me a letter that said:
⠀⠀⠀⠀⠀⠀⠀⠀⠀
“As I sit here on the edge of paying our home off I understand that it isn’t completely about us. Our job is to set the next generation up to do better than us, which makes me think of the generation before me. This final payment would not be possible without [Kim’s dad]. He spent his life working for this money and passed away before he got to use it for himself. We agreed to use that money in a way that would always honor him. So for the past 6 years it has funded our oldest son’s 529 [via the minimum required distribution]. Today, that money has grown enough to pay off our mortgage without touching the initial principal. Today we sever ties to debt forever. Today, we say thank you to [Kim’s dad] for the sacrifices he made and the foundation he laid that made it possible. THANK YOU!!”
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Of course after l finished reading the letter I was like... 🥺😭. Truth be told, I still kind of feel that way. It’s part of why it took so long to share the details of paying off our mortgage. Losing a parent is hard.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Pictured is my dad and I... my favorite picture of of us. He passed away 6 years ago on NYE. He was only 62. After he passed, I found out I was “entitled” to receive part of his pension. Omar and I decided to use some of this money to pay off our mortgage. This is how we were able to pay off most of our $54k balance 7 days into this year.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
This is the short version, but if you want the full details, we wrote a blog post sharing:
⠀⠀⠀⠀⠀⠀⠀⠀⠀
• a recap of our initial mortgage payoff plan + payoff journey
• some background info about the pension + how we almost cashed it out when we first found out about it
• the breakdown of the $$ that it took to make this happen + why we did it this way
• how some things didn’t go as planned
• and each of our thoughts in regards to all of this
⠀⠀⠀⠀⠀⠀⠀⠀⠀
You can find the link in our bio.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
“In all that I do, I strive to make my parents proud. I like to think my dad would be damn proud of me... of us, for this one.” Kim #piecesofsomeday
#tbt To last Thursday (1/7/2021) when we became mo #tbt To last Thursday (1/7/2021) when we became mortgage free!! Yes, you read that correctly! We are 100% debt free! Like debt free, debt free. 🤣
⠀⠀⠀⠀⠀⠀⠀⠀⠀
To be honest, it’s been a week and it still doesn’t feel real to us yet. But it was real watching that money disappear from our account and no longer seeing our mortgage balance when we signed into our credit union account. We must say, our credit union works pretty fast! Lol.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
We didn’t even get around to sharing our mortgage payoff goal for the year with one of the little cute pictures explaining how we were going to do it. But here’s a quick recap of the numbers that we were working with...
⠀⠀⠀⠀⠀⠀⠀⠀⠀
• mortgage principal: $54,507.37
• mortgage interest: $35.84
• reconveyance fee: $69.00
• paying off our mortgage... definitely not priceless, but oh so worth it!! 😂🙌🏽
⠀⠀⠀⠀⠀⠀⠀⠀⠀
We’ll share more in depth details soon because you’re probably wondering how we came up with that amount of money 7 days into January. It definitely wasn’t from hitting the lottery! Lol. But until then, just know that...
⠀⠀⠀⠀⠀⠀⠀⠀⠀
WE’RE MORTGAGE FREE!!! #piecesofsomeday
So we took some Christmas / family pictures back i So we took some Christmas / family pictures back in 2020 (as if that was so long ago), but I never got to share them. 😩 So here’s one. I actually like the fact that it’s in front of our house. #piecesofsomeday
⠀⠀⠀⠀⠀⠀⠀⠀⠀
And I also wanted to add that we finally did another blog post after quite some time. Maybe we’re the world’s worst bloggers. 🤷🏽‍♀️🤷🏽‍♂️ But if you’re interested, we’re sharing a recap of quarter 3 and quarter 4 from our mortgage payoff journey. We’re also sharing what our mortgage payoff goal is for 2021. We’re a bit excited about it! You can check it out at the link in our bio.
2020. This has been a year that I’m sure none of 2020. This has been a year that I’m sure none of us will ever forget. While this year has been ok for us for the most part, there are many people that it’s been a really really tough year for. Whether it’s been financially, emotionally, health wise, etc. etc. etc. So here’s to hoping that next year will be much much better, for everyone, but especially for those who had a tough time this year. ✨♥️
We started 2020 off with owning 43% of our house a We started 2020 off with owning 43% of our house and we now own 69% of it. We had paid off 39% of the mortgage loan and we’re finishing the year out at having 66% of it paid off. (These 2 numbers are not the same for us because of our 5% down payment as well as when we refinanced to a 15-year mortgage.) It’s been really exciting to see these numbers increase this year.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
(Annnnnd this concludes our December numbers. I can’t believe I managed to share them all before the end of the year!! 😂)
Q4 was our best quarter by far, mostly due to the Q4 was our best quarter by far, mostly due to the RSUs that we were able to use. However, even if we hadn’t been able to use them, Q4 would have still wrapped up nicely thanks to us still being able to stick to our 70/30 plan.
For December we were able to color in 4 rectangles For December we were able to color in 4 rectangles. This puts our mortgage balance for the end of 2020 at $54,507.37.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
• 132 rectangles total
• 88 rectangles colored in
• 44 rectangles to go!!
The total of our mortgage principal payments for D The total of our mortgage principal payments for December was $3514.74.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
$995.13 came from our regular payment and $2519.61 came from our budget.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
This put us at meeting our second stretch goal of putting a total of $45,000 towards our mortgage principal for the year! Yes, we did a little magic with our budget in order to get it at exactly $45k, but I’m sure that’s what we all do in when we’re trying to hit a certain number!! Haha.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
We’re soooo happy that we were able to meet this goal because we really weren’t sure if it was going to be possible or not!
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See what’s happening on Instagram

thinkingofsomeday

No long caption. I just wanted to make our last “mortgage principal payoff” calendar update. 😆 It’s been a month and it still feels surreal to us...
On Christmas Eve morning, Omar left out of the bed On Christmas Eve morning, Omar left out of the bedroom saying that he had to go work on something. When he came back he handed me a letter that said:
⠀⠀⠀⠀⠀⠀⠀⠀⠀
“As I sit here on the edge of paying our home off I understand that it isn’t completely about us. Our job is to set the next generation up to do better than us, which makes me think of the generation before me. This final payment would not be possible without [Kim’s dad]. He spent his life working for this money and passed away before he got to use it for himself. We agreed to use that money in a way that would always honor him. So for the past 6 years it has funded our oldest son’s 529 [via the minimum required distribution]. Today, that money has grown enough to pay off our mortgage without touching the initial principal. Today we sever ties to debt forever. Today, we say thank you to [Kim’s dad] for the sacrifices he made and the foundation he laid that made it possible. THANK YOU!!”
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Of course after l finished reading the letter I was like... 🥺😭. Truth be told, I still kind of feel that way. It’s part of why it took so long to share the details of paying off our mortgage. Losing a parent is hard.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
Pictured is my dad and I... my favorite picture of of us. He passed away 6 years ago on NYE. He was only 62. After he passed, I found out I was “entitled” to receive part of his pension. Omar and I decided to use some of this money to pay off our mortgage. This is how we were able to pay off most of our $54k balance 7 days into this year.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
This is the short version, but if you want the full details, we wrote a blog post sharing:
⠀⠀⠀⠀⠀⠀⠀⠀⠀
• a recap of our initial mortgage payoff plan + payoff journey
• some background info about the pension + how we almost cashed it out when we first found out about it
• the breakdown of the $$ that it took to make this happen + why we did it this way
• how some things didn’t go as planned
• and each of our thoughts in regards to all of this
⠀⠀⠀⠀⠀⠀⠀⠀⠀
You can find the link in our bio.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
“In all that I do, I strive to make my parents proud. I like to think my dad would be damn proud of me... of us, for this one.” Kim #piecesofsomeday
#tbt To last Thursday (1/7/2021) when we became mo #tbt To last Thursday (1/7/2021) when we became mortgage free!! Yes, you read that correctly! We are 100% debt free! Like debt free, debt free. 🤣
⠀⠀⠀⠀⠀⠀⠀⠀⠀
To be honest, it’s been a week and it still doesn’t feel real to us yet. But it was real watching that money disappear from our account and no longer seeing our mortgage balance when we signed into our credit union account. We must say, our credit union works pretty fast! Lol.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
We didn’t even get around to sharing our mortgage payoff goal for the year with one of the little cute pictures explaining how we were going to do it. But here’s a quick recap of the numbers that we were working with...
⠀⠀⠀⠀⠀⠀⠀⠀⠀
• mortgage principal: $54,507.37
• mortgage interest: $35.84
• reconveyance fee: $69.00
• paying off our mortgage... definitely not priceless, but oh so worth it!! 😂🙌🏽
⠀⠀⠀⠀⠀⠀⠀⠀⠀
We’ll share more in depth details soon because you’re probably wondering how we came up with that amount of money 7 days into January. It definitely wasn’t from hitting the lottery! Lol. But until then, just know that...
⠀⠀⠀⠀⠀⠀⠀⠀⠀
WE’RE MORTGAGE FREE!!! #piecesofsomeday
So we took some Christmas / family pictures back i So we took some Christmas / family pictures back in 2020 (as if that was so long ago), but I never got to share them. 😩 So here’s one. I actually like the fact that it’s in front of our house. #piecesofsomeday
⠀⠀⠀⠀⠀⠀⠀⠀⠀
And I also wanted to add that we finally did another blog post after quite some time. Maybe we’re the world’s worst bloggers. 🤷🏽‍♀️🤷🏽‍♂️ But if you’re interested, we’re sharing a recap of quarter 3 and quarter 4 from our mortgage payoff journey. We’re also sharing what our mortgage payoff goal is for 2021. We’re a bit excited about it! You can check it out at the link in our bio.
2020. This has been a year that I’m sure none of 2020. This has been a year that I’m sure none of us will ever forget. While this year has been ok for us for the most part, there are many people that it’s been a really really tough year for. Whether it’s been financially, emotionally, health wise, etc. etc. etc. So here’s to hoping that next year will be much much better, for everyone, but especially for those who had a tough time this year. ✨♥️
We started 2020 off with owning 43% of our house a We started 2020 off with owning 43% of our house and we now own 69% of it. We had paid off 39% of the mortgage loan and we’re finishing the year out at having 66% of it paid off. (These 2 numbers are not the same for us because of our 5% down payment as well as when we refinanced to a 15-year mortgage.) It’s been really exciting to see these numbers increase this year.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
(Annnnnd this concludes our December numbers. I can’t believe I managed to share them all before the end of the year!! 😂)
Q4 was our best quarter by far, mostly due to the Q4 was our best quarter by far, mostly due to the RSUs that we were able to use. However, even if we hadn’t been able to use them, Q4 would have still wrapped up nicely thanks to us still being able to stick to our 70/30 plan.
For December we were able to color in 4 rectangles For December we were able to color in 4 rectangles. This puts our mortgage balance for the end of 2020 at $54,507.37.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
• 132 rectangles total
• 88 rectangles colored in
• 44 rectangles to go!!
The total of our mortgage principal payments for D The total of our mortgage principal payments for December was $3514.74.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
$995.13 came from our regular payment and $2519.61 came from our budget.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
This put us at meeting our second stretch goal of putting a total of $45,000 towards our mortgage principal for the year! Yes, we did a little magic with our budget in order to get it at exactly $45k, but I’m sure that’s what we all do in when we’re trying to hit a certain number!! Haha.
⠀⠀⠀⠀⠀⠀⠀⠀⠀
We’re soooo happy that we were able to meet this goal because we really weren’t sure if it was going to be possible or not!
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