Eight money moves to make when you find out you're pregnant(Read article summary)
From figuring out parental work leave, to researching preschools, there's a lot of advance research that has to happen when you find out you're pregnant.
In the U.S., we welcome close to four million babies every year. These little bundles of joy rock our worlds and, often, our budgets as well. As a parent of three wonderful boys, I tried to prepare as much as I could before for their arrival.
Between deciding what car seat to buy and picking out the perfect name, take the time to plan ahead for the financial wellbeing of your baby, your family, and yourself. Here are the top eight money moves to make when you find out you're pregnant.
1. Figure Out Parental Leave
Unlike other industrialized countries, the United States is the only nation without paid parental leave required by law. Under the U.S. Family and Medical Leave Act, employers with 50 or more workers are required to let their employees take unpaid, job-protected leave for 12 weeks after the birth of a child, while keeping their group health insurance coverage.
However, about 13% of Americans do have access to some form of paid leave. So, inquire with your employer your options:
Find out if the size of your company affects policy (e.g. businesses in Hawaii with 100 or more employees are subject to the Hawaii Family Leave Law);
Ask your employer whether or not they offer temporary disability insurance (TDI) under its health insurance plan, what percentage of your salary that TDI pays, and whether or not you qualify for TDI;
Figure out if TDI is affected by method of delivery (usually six weeks for a normal vaginal delivery and eight weeks for an uncomplicated cesarean delivery); and
- Discuss with your manager about the type of leave you'd like to take.
2. Discuss Flexible Work Arrangement
Whether you're the primary caregiver, or a spouse or partner that wants to be more involved during baby's first months, talk with your employer about a flexible work arrangement. Times are changing and more and more companies are willing to work with their employees to create flexible arrangements.
Dads, don't shy away from asking your employer about a flexible work plan. According to the Professional Women Report survey by Citi, when asked about their biggest career regrets, 17% of men would have spent less time at work and more time with their families or on personal pursuits. Not spending enough time with their children was ranked within the top five career regrets by men. It's worth a shot because 14% of fathers receive some amount of replacement pay for paternity leave.
3. Choose a Health Insurance Plan
Another important move is to decide to whose health insurance plan you'll add your baby. Ask your HR department to detail your available options if you were to add children or your spouse to your plan. Ask your partner to do the same with their employer. Then, compare the available options and choose the plan that better serves your needs.
Don't forget to consider if some doctors that you currently visit, or will visit in the future, will be within the network of those plans. A plan may offer attractive coverages, but those benefits may be cancelled out by paying higher copays for visiting doctors outside the network.
4. Get a Breast Pump
Most health insurance plans must provide breastfeeding support, counseling, and equipment for the duration of breastfeeding. Contact your insurance plan for more details about applicable benefits.
Of special attention is the coverage of a breast pump, which could be a rental or for you to keep, manual or electric, or available before or after birth. Depending on your plan, it may cover even some of the premium breast pump models, some of which retail for close to $300. Your plan must cover the entire cost of the breast pump!
Depending on the retailer and your plan, you may only be able to redeem your breast pump by visiting in-person authorized retailers or by calling a centralized redemption center.
5. Look for Hand-Me-Downs and Secondhand Stores
Take it from a dad of three boys: You will get so many clothes and toys, that many of them will go unused. For my third boy, my wife and I barely bought him clothes because he inherited all of his brothers' (some even still in their original packaging).
Many of your friends and relatives have been waiting for the opportunity to share their baby clothes with you. This is a great free way to determine whether or not a onesie, burp cloth, or toy is worth the purchase. If you and your baby enjoy an item so much that it wears out in a few months, then purchasing that item brand new is definitely worth it.
Also, find out through social media and search engines about secondhand stores for baby items in your area. Secondhand stores are very useful for exchanging unwanted gifts that have no receipt for items that you or your baby really need.
6. Join Amazon Family
Formerly known as Amazon Mom, Amazon Family is a variation of the Amazon Prime program, focusing on parents and caretakers with family-oriented offers. This includes 20% off diaper subscriptions, free two-day shipping, and a 15% baby registry completion discount.
To maximize your savings, look for a free trial opportunity (which range from 30 to 90 days), test it out, and then decide if you would like to keep your Amazon Family subscription ($99 per year). During the trial period, look for high-ticket items, including strollers and cribs, that may be cheaper at Amazon than at local retailers. In my case, I saved about $200 on a crib and close to $150 on a stroller.
7. Research Babysitting and Preschool Options
Now is the time to start looking for babysitters and preschools. It may sound a bit extreme, but many preschools have waiting lists that go back one to two years. Your future self will thank you that you took the time to do this in advance and you don't have to settle for subpar alternatives.
8. Research Custodial Investment Accounts and 529 College-Saving Plans
Imagine if somebody offered you an extra 20 years to save for retirement or college — would you take it? In a heartbeat! That's why you should look into setting up a custodial investment account or 529 plan for your child.
Custodial Investment Account
Many brokerage houses allow you to set up an account to make a financial gift to a minor and help teach them about investing. With as little as $100, you can open a custodial account, have $0 maintenance fees unless you make a trade, and enjoy tax-free earnings until a specified limit. The account will be turned over to your child when he or she reaches the age of majority.
529 College-Savings Plan
The earlier that you start saving for your child's education, the less that you will have to contribute per month. Also, remember that federal taxes don't apply to earnings in a 529 plan, and 34 states offer full or partial income tax deductions.
This article first appeared at Wise Bread.