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How to budget for baby: From a positive pregnancy test to labor & delivery

So you’re having a baby!

Life is about to get a lot more exciting (and fun! and exhausting!). But, before we get to the fun stuff, let’s make sure your pregnancy is as financially stress-free as possible.

As a financial planner who focuses on how to help Millennials get smart about their money, I know lots of women wonder how they can budget for life once they find out they’re having a baby. I’m sharing my answers to many of FAQs I get from new moms on you can focus on having a healthy child instead of worrying about how you’re going to pay for it all.

Where do I start?

First things first: When you get the good news, call your insurance company and find out exactly what they cover, including ultrasounds and c-sections. If you have a good relationship with your OB-GYN, you could also ask them to call on your behalf. Some insurance plans will cover everything and you are just responsible for the co-pay, others will only cover part of the services you need.

How much are all these doctors visits going to cost me?

You will need to go to the doctor at least once per month while you’re pregnant and every week towards the end of the pregnancy. Even if you have good health insurance, this can add up. Once you get information from your insurance company, add up what you expect each visit to cost so you have a clear idea of the number going in and can set aside extra funds for it.

Visits for a low deductible plan with a co-pay can run you as little as $15 per visit. If you have a high deductible plan or your insurance doesn’t cover certain tests or procedures, you may have to plan for each visit costing between $150-$300.

Are there any tricks to spending less at the doctor?

If you can, pay with pre-tax dollars, If your insurance is through an employer at work and you have a low or no-deductible health plan, max out your Flex Spending Account (FSA). The max contribution in 2015 is $2,550 and you will most likely go through all of it! This will allow you to pay for doctor’s visits and other medical bills with pre-tax dollars which can save you between 25-40% of every dollar you put in. Also, since it comes out of your paycheck before it hits your direct deposit, it’s like a secret savings account.

If you have a high deductible health plan (deductible is $2,600 or more for a family), you can contribute to a Health Savings Account (HSA) and can contribute up to $6,650 to this account. It works similarly to an FSA, except you’re not required to spend the funds down at the end of every year. This means if you don’t use all your HSA money, you can put it towards post-baby medical care.

How can I get great maternity clothes on a budget?

It can be tempting to stock up on maternity clothes, especially as your belly starts to show (and no, these aren’t covered by your FSA!), but keep in mind that in a few months, you may be sticking them in the bottom of a suitcase. Many budget-conscious moms-to-be will buy a pair or two of maternity pants and stick to dresses and flowy shirts they can slip back into their wardrobe once the baby is out. Other mamas use sites like ThredUP which let you rock pre-loved maternity clothes at a much more affordable price point. Go wherever your budget takes you mama, but know that you can find relatively inexpensive maternity clothes, and even rock skinny jeans for about $40.

What about extras like prenatal vitamins?

Prenatal vitamins are relatively inexpensive (even on the high end, a 4 month supply will run you about $40) and will help ensure that you cover any nutritional gaps you may have during pregnancy. Talk to your doctor about the prenatal vitamins she or he recommends and buy a few bottles. Bonus! Prenatal vitamins can actually be paid for using your FSA or HSA so they’re a health and financial win.

What will childbirth education classes run me?

Especially if you’re a first time mom, it will most likely be worth it to take a few childbirth education classes so you have an idea of what to expect when you’re giving birth. Your hospital may offer these classes for low or no cost to you. Sometimes, insurance will also cover some or part of the cost (ask your insurance company this too!) You can also use your FSA or HSA to pay for the classes, as long as the class is related to the process of childbirth (which means classes on your emotional state, potential pregnancy discomforts, post-baby care, etc. won’t be covered). On the high end, you can expect a place like Stork and Cradle in NYC to cost $350 for 4 classes, but they also take some insurance, so it’s always worth checking out.

So how much will labor and delivery cost?

The Big Day: Even with insurance,the average cost of actually giving birth is about $3,400, with vaginal births averaging about $2,600 and c-sections about $4,500. Most hospitals will allow you to go on a payment plan to cover the costs, but since you have 9 months, see if there’s any wiggle room for you to set aside some of the money now to cover the big bills.

Ask your insurance company if they can help you estimate this amount too. Once you’ve recovered a little from the sticker shock, divide the number by 9 to get an idea of what you would need to save monthly towards the hospital bills. Then cut that number in half and make it a mini-goal to save at least that amount each month so when the hospital bills do come, you’ll be able to cover a portion of them and pay significantly less interest on any funds you do need to borrow to pay for the rest of the bill.

A Special Note on Insurance:

Without insurance, it can cost between $30,000 and $50,000 (not a typo!) to give birth to a child. Luckily, with the Affordable Care Act, having a baby actually qualifies you to participate in a special enrollment period and you can purchase health insurance within 60 days of conception, even if it’s not during the regular open enrollment period between November and February. Premiums range between $200-$500 per month, depending on the plan you choose, and it’s much more manageable than going without a healthcare plan.

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