Newspaper article St Louis Post-Dispatch (MO)

Baby Steps If You're Planning to Have a Child, It's Important to Begin Budgeting Early

Newspaper article St Louis Post-Dispatch (MO)

Baby Steps If You're Planning to Have a Child, It's Important to Begin Budgeting Early

Article excerpt

Marie and Glenn Robinson have locked in on a goal. To reach it, the Shaker Heights, Ohio, couple have been saving an extra $250 monthly since March, putting the money in a separate bank account. The package they are saving for arrives in September, but there won't be airline tickets for a second honeymoon or keys to a sports car inside.

No, theirs is the gift that keeps on giving. The Robinsons are expecting their second child in a matter of weeks.

As they learned when their daughter was born four years ago, a new baby is also the gift that keeps on taking. Babies take time, energy and especially money.

Delivery alone can cost $15,000 to $20,000, although most parents with health insurance won't have to budget for nearly that much.

Diapers, formula, clothes and toys can squeeze an additional $5,000 from the first year's budget, said Cleveland financial planner Paula Peck.

When preparing for a new addition to the family, don't forget to feather your financial nest as well.

There are several steps expecting parents can take to help smooth the transition and save money:

1. While stitching booties and bibs, start knitting a safety net.

Have an emergency fund to bridge the gap of any unpaid leave from work, urged Steve Allen, district manager of American Express Financial Advisers in Beachwood, Ohio.

This should be in addition to the minimum three- to six-month rainy-day fund all families should keep accessible in case of job loss, medical bills and other unplanned emergencies.

Calculate how much money you will lose from unpaid maternity or paternity leave. Then create a savings plan to reach that number, which could mean having money automatically withdrawn from your paycheck.

2. Review your health-care coverage.

Some policies are more comprehensive than others. For the first year, newborns visit the doctor about once every other month for checkups and immunization.

Some plans cover well-care entirely, partially or not at all. Coverage may determine whether you will need to work longer into pregnancy, take less leave time or moonlight for extra cash.

If given the option, notify your human resources department about shifting from individual coverage to a family plan, which could be a better deal. …

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