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How to prepare for the unexpected when you're expecting
Key takeaways:
A new baby is an exciting addition to your family, but in addition to the coos and cuddles, the reality is that babies also bring extra expenses. Welcoming a new baby into your home requires clothes, furniture, hygiene products, and other essentials, and, of course, you’ll also face medical expenses during your pregnancy and from labor and delivery.
Your baby will also have ongoing expenses such as childcare, diapers, and food. While you can budget for these costs, you have to think about the unexpected expenses as well. To ensure you're financially prepared for a baby, you should really consider setting up an Emergency Savings Account (ESA). An ESA will help you weather the unexpected costs and financial emergencies that happen in a growing family. Here's why enrolling in an ESA should be part of your family planning.
The cost of having a baby
The cost of having a baby varies based on where you live and your health insurance coverage. On average, it starts at about $3,000 and goes up from there. This cost includes all of the medical expenses you are likely to incur while receiving prenatal and hospital care during labor and delivery.
Your expenses will most likely be higher if you have a C-section or face complications during pregnancy or delivery. To prepare for these expenses, talk with your insurance provider so that you know what to expect. Then, start setting aside money for these costs as soon as possible. Note that if you have a comprehensive insurance plan, such as Medicaid or certain employer plans, you may not have to pay anything out of pocket.
Additional expenses for new babies
Medical bills are likely to be the most expensive, unavoidable costs you'll incur when bringing a new baby into the world. On top of that, you need to prepare your home for a baby. For some new parents, this process can be as inexpensive as painting the extra bedroom and setting up a hand-me-down crib.
Other families may decide to move into a bigger home, buy all new nursery furniture, and stock dressers full of adorable clothes. Ultimately, you have to decide what you want and what you can afford. Then, you can outline your expenses, make a plan to pay for them, and move forward.
Preparing for the unexpected
The above baby expenses are predictable. You know they are coming, and you can budget for them. New parents quickly learn, however, that there are all kinds of unpredictable elements that come with new babies.
Your baby will most likely require unexpected expenses. While most parents delight in the surprises their new child brings, they often struggle with the unexpected bills.
How can you prepare for the unexpected? What should you do to minimize the stress of emergency baby expenses? You cannot predict when emergencies will happen or when new costs spring up, but you can reduce your stress by setting up an Emergency Savings Account (ESA).
What is an ESA?
An ESA is a savings account designed to help you with the unexpected and emergencies. It differs from a traditional savings account because you don't know how you're going to use the money. For example, if you're saving for a down payment on a new home, for nursery furniture you love, or for the baby's college expenses, you know what you're saving for. You have a goal, and you're working toward it.
In contrast, you don't know how you're going to use the funds in an ESA…and that’s the point. You just know that you want to be ready if something happens. An ESA provides that security blanket.
Unexpected expenses related to having a baby
As mentioned above, babies can bring all kinds of unexpected bills. You might face higher-than-expected medical expenses if there are any complications. Once you have the baby, they may have needs that you didn't anticipate.
Throughout their early life, you may face unexpected costs such as hiring a lactation consultant or needing to find replacement daycare when your regular child care provider is unavailable. You might discover that you need to buy extra items. For example, if your baby doesn't sleep well at night, you may want to invest in black-out curtains, a white noise machine, or similar items.
You might decide that you want to purchase a swing to soothe the baby during the day. Or, you might have to buy a new car seat if yours breaks. These are just a few examples of the variety of unexpected costs that come with a baby.
Why you need to be prepared for the unexpected
You can’t identify unexpected costs before they happen, but you will most likely face them. Even a cost that is not directly related to your new baby can affect them. For example, imagine that your only vehicle breaks down. If you have $500, you can easily repair it and get back to life as usual. If you don't have extra funds lying around, you will be forced to spend exorbitant amounts of money on ridesharing and cabs, or you may be stuck taking the bus.
You will struggle to get your child to daycare or family's homes, and you may not even be able to get to work. If you have an ESA, you can easily take care of unexpected expenses such as a critical car repair. Without an ESA, these types of emergencies can snowball. You may even risk losing a big source of income if you can’t get to work.
Talk with your employer about SecureSave
To prepare for your new baby, you need to prepare for both the expected and the unexpected. The latter requires an ESA. You can set one up on your own, but you should strongly consider asking your employer for help. An ESA from SecureSave that can be administered through your employer comes with a lot of benefits, such as employer contributions. Having that element of assistance can help you save even more.
To get your employer on board with setting up an ESA for workers, talk with them about SecureSave. SecureSave makes saving for emergencies easy and rewarding. It allows you to create an account in seconds, get matching contributions from your employer, and access your money whenever you need it. We help set an achievable savings goal and get you prepared for the unexpected.
To learn more about this valuable benefit, get on the waitlist today. We will talk with your employer about the value of emergency savings as an employee benefit and get you saving for the future.