Pregnancy is a thrilling time, but it can also be touched by anxiety because of the massive changes parenthood will bring. An effective way to prepare for your bundle of joy is to have a financial plan, which you should ideally begin as soon as you're considering starting a family.
Having a child has monetary impacts—changing spending patterns and limiting disposable income. There’s a list of essential baby needs to buy when expecting a baby, but the spending doesn't end there. You need to consider all aspects—from prenatal health to baby care and when your child grows up. This way, you can truly prepare for the financial expectations when having a baby.
Consider the costs you'll encounter even before your little one arrives, like prenatal care and hospital bills.
It may be wise to get a Health Maintenance Organization (HMO) for pregnant clients to manage costs. Study different packages and coverage choices that best suit your needs. Also, look into PhilHealth deduction on hospital bills.
Then, there’s a list of baby essentials for first-time parents you'll need right after birth: baby gear such as a crib, stroller, and car seat, along with diapers that can be disposable or reusable. If you plan to formula-feed, account for that cost, or if breastfeeding, consider investing in a good pump and other necessary supplies.
Childcare is another significant expense to consider. Whether you’re planning to return to work and need daycare or looking into part-time options, it's important to factor these costs into your budget early on.
Lastly, don’t forget about future education costs. Starting a small savings fund now, even if it’s just a little each month, can make a big difference later on.
By planning and allocating funds for these expenses, you can ensure that you’re prepared and can comfortably cover them without compromising your overall financial stability.
Take some time to review your health insurance policy thoroughly. You want to understand exactly what prenatal and postnatal services are covered. This will help you avoid any unexpected costs and ensure that both you and your baby get the necessary medical care without extra stress.
When your little one arrives, you’ll want to add them to your health insurance policy as soon as possible. Many policies have a specific window of time for you to do this, so it's a good idea to check those details now to avoid any last-minute rush.
Also, review your risk insurance policies. Life and Health Insurance offers financial protection for your loved ones in the event of unexpected circumstances. As your family grows, it's essential to ensure that your coverage is sufficient to meet their needs. This might mean increasing your coverage to provide financial security for your growing family to prepare for risks such as income loss, accidents, and illnesses. You can also insure your assets to protect yourself against fire incidents, personal accidents, travel inconveniences, and medical expenses.
These policies provide peace of mind during challenging times, letting you focus on caring for and supporting your child.
Understand your workplace benefits and policies regarding maternity or paternity leave. Start by checking how many days are included in these leaves offered by your company.
Under Philippine law, eligible mothers can take 105 days of paid maternity leave, with an option to extend for an additional 30 days without pay. Fathers can avail of 7 days of paid paternity leave. Some companies might offer more benefits, so it’s best to confirm the exact details with your HR department.
For mothers, the Social Security System (SSS) provides maternity benefits, but the amount depends on your contributions. Find out much you’ll receive and when, so you can plan your budget accordingly. If there’s a gap between your regular income and the benefits provided, think about how you’ll cover that difference.
As you prepare for the arrival of your baby, having an emergency fund becomes even more crucial. Think of it as your financial safety net for those unpredictable moments that can eat into your budget.
Try to save at least three to six months' worth of living costs. This might sound like a lot, but breaking it down into smaller, manageable goals can make it feel less daunting. Start by setting aside a little bit each month, and over time, you’ll see your fund grow.
This emergency fund can cover a range of unforeseen circumstances. For instance, babies sometimes come with unexpected medical expenses. Even with good health insurance, you might find yourself needing to pay for additional treatments, medications, or specialist visits that aren’t fully covered.
Another scenario where your emergency fund can be a lifesaver is if there's a reduction in income during your parental leave. While you might receive some compensation through your leave benefits, it’s often not the same as your regular salary. Your emergency fund can help bridge that gap, ensuring you can pay your bills and maintain your standard of living while you’re away from work.
A family budget is crucial in maintaining financial security. Start a family budget planner that includes your income, expenses, savings goals, debt repayment, and a budget summary that shows whether you have a surplus or deficit for the month.
How to make a financial plan for the family? You can use spreadsheets, budget apps, and good old-fashioned pen and paper. Here are more tips to make this economic transition easier for you.
Being a parent is a fulfilling journey, but it's also a time to be mindful of your spending habits. Planning your finances even before your pregnancy assures you that your family is secure, allowing you to devote more attention to your bundle of joy. From savings to protection to the in between, Chinabank can help you better prepare for your growing family financially.
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