The arrival of a new baby is all consuming. In the early weeks, your waking hours are a cycle of feedings, nappy changes and googling, “Is it normal for a baby to (fill in the blank)”.
Mustering the energy — and attention span — for otherwise routine tasks such as showering and paying bills can feel like a tall order. You’ll be lucky to remember what day it is, much less when your next credit card payment is due.
Do your future, sleep-deprived self a favour and start prepping your finances early in your pregnancy so things can run on autopilot for a while after the baby arrives.
If you don’t already have a budget, start there, says Cecilia Williams, a mother, certified financial planner and chief operating officer of Halbert Hargrove, a financial planning company.
“Outline all your current income and expenses so you and your partner have a solid understanding of where your money goes each month,” Ms Hargrove says.
“This will absolutely need to be adjusted as you get closer to your due date, so having a starting point is priority No1.”
Then build a plan for managing the other costs, large and small, that come with having a baby.
Research the cost to deliver your child
The price tag for childbirth can be steep. Even with insurance, new parents can expect to pay some money out of pocket for maternity care.
Contact your insurer or the hospital where you plan to deliver to get more specific numbers. Then take a deep dive into your healthcare coverage to understand your coinsurance, deductible, maximums and coverage limits. Use these figures to set a realistic savings goal to cover them.
Plan ahead for parental leave
If you have paid leave through your employer, ask questions early. Find out how many weeks are covered and at what percentage of your salary. Do you need to use vacation and sick time first?
You also want to know when and how your benefits will be paid out, especially if they’ll come from several sources.
Trust me, you don’t want to be one week postpartum emailing your benefits provider to unravel the logistics of your leave payments.
If you don’t have access to paid leave, or you’re planning to take additional unpaid time, practise living on a reduced income to the extent possible. This will help you identify optional expenses to reduce or eliminate and help you build a savings cushion before your baby’s arrival.
Start saving for child care
Child care is the single largest monthly expense for most new parents. Get a jump start by paying for day care well before your baby arrives.
Put the money into a separate savings account — ideally one that earns interest — every week or month. This helps you adjust to the new expense and allows you to bank a few months of child care costs that you can tap for upfront costs such as deposits and application fees.
Not sure what child care costs in your area? Ask around your friend group or local parent group to get a sense of what day care, a nanny or other arrangements cost.
You can also build other baby essentials, such as nappies, formula and wipes, into your budget now, making an educated guess. It doesn’t need to be perfect; you can adjust down the road.
Automate bills and credit card payments
Set any recurring bills to autopay, ideally from one account or credit card. If you can, go one step further and set that card to autopay, too.
Carly Campbell, a blogger and stay-at-home mother of two, says this was one of the best things her family did before welcoming their first child.
“All the various bills were taken care of without our active attention,” she says. “We only had to check the bank account once per month to make sure there was enough for the lump-sum payment.”