Planning ahead for your first baby: Are you financially ready?

A baby may be small, but the expenses Mr. Stork will deliver along with your baby are quite large. Planning ahead for your first baby will make your financial life go a lot smoother after the delivery!

Babies! They’re so cute, cuddly and… a diaper-full of expenses. It begins with the doctor and hospital bills, then continues with decorating the nursery, baby equipment, formulas, food and diapers… ohhh, and so many expensive diapers. How can planning ahead help make it a smoother ride down Baby Lane?

Health Insurance

Planning ahead for your first baby includes health insurance! The cost of maternity and baby expenses can be staggering. Doctors’ bills will add up quickly when you consider pre-natal visits, the baby’s delivery and then monthly check-ups after junior is born. If possible, make certain you’re secure with good health insurance before thinking of starting a family, since it’s almost impossible to become insured once you’re pregnant.

If you’re already “in a family way” and without health insurance, check whether your state offers an insurance program helping uninsured pregnant women. You’ll probably be required to meet the income requirements, even if not a US citizen. Another program providing a solution for uninsured pregnant moms is called Maternity Card.

Financially planning ahead for your first baby

Open a higher interest bearing money market savings account in anticipation of your new addition. Automatic withdrawal each pay period from your checking account into this “baby” savings account will guarantee a consistent growth in its balance.

Getting your baby account money to grow faster

Planning ahead for your first baby not only means thinking about your baby’s growth, but your money’s growth, as well. Consider transferring funds from your money market account to higher interest bearing Certificate’s of Deposit (CD’s) once the savings balance is into the thousands.

By using a system called “laddering” of CD’s, you can purchase various shorter term CD’s with different maturity dates, enabling you to roll the funds over into higher interest bearing CD’s as each matures. Shorter term CD’s maturing at different times also assures your assets are more liquid should a need for money arise, since early CD withdrawal may mean an early withdrawal penalty or even forfeiting all the accrued interest. (Some banks will allow you to take a loan against the CD for less than the penalty fee, if the need arises.)

Your cute little, new tax deduction

See a tax advisor and learn how your new baby will help your yearly tax burden decrease. Know what receipts to save for the upcoming tax season. Wise tax planning will let the credit for the additional tax exemption offset the increased expenses of your new baby.

Planning ahead for saving in little ways

Start clipping store coupons for baby needs now! The amount you can save with coupons on items like formula, baby food, diapers and baby lotion adds up quickly. You’ll appreciate having a good stash of coupons once you start seeing how quickly grocery bills will grow with a new mouth to feed. If you have storage room, start purchasing items ahead of time to avoid expiring coupons.

Planning ahead for your first baby means less financial stress later

If visions of that stork circling your roof keep appearing in your mind’s eye, don’t run to the baby store! Run to your bank and health insurance company, instead. Of course, it’s also a wise idea to consult with a professional financial advisor for advice that best fits your particular situation. You’ll be able to rest assured and stress-free once you know you’re financially comfortable and ready for your growing family. Then, you can enjoy your baby worry free after the stork has made his precious delivery.


Start saving at an early age! Be consistent and regular about saving. Even saving a small amount per paycheck will add up and compound quickly, allowing you to fulfill your life’s dreams for the present and for the future. Don’t put it off until tomorrow, even if you are only able to save a few dollars from your paycheck today.

Resource: Bryce Molloy, Licensed Banker, Chase Investment Services, J. P. Morgan Chase Bank

More information on budgeting for a baby:

Pregnancy and Baby: Baby on a budget
Low-cost or free health insurance for babies and mamas
Pregnant without insurance
Oh baby: Your new little tax deduction


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