According to Parents.com, “On average, U.S. hospital deliveries cost $3,500 per stay, according to the Agency for Healthcare Research and Quality Healthcare Cost and Utilization Project. Add in prenatal, delivery-related and post-partum healthcare, and you’re looking at an $8,802 tab, according to a Thomson Healthcare study for March of Dimes.”
Of course, such costs can vary significantly depending upon a number of factors including type of insurance, length of stay at the hospital, and any potential complications.
Having gone through the process of having a baby twice ourselves – at two different hospitals, in two different states, and with two different insurance providers – we’ve seen just how the process can vary. However, in both situations, there was certain information that we found critical when having our babies.
Emergency fund level
With the baby tab possibly coming in at several thousand dollars or more, it’s important to know what sort of reserve funding is available for when those big bills start to arrive. Suze Orman advocates eight months worth of living expenses in an emergency fund. Having this money in a checking or savings account means that it remains liquid and is available to cover those higher baby bills as they start to trickle in.
Insurance deductible and out-of-pocket limits
In an effort to pre-plan baby costs, it can be pertinent to know about health insurance coverage and how – and in what amounts – it will be applied. A deductible (either per person or as a family) may have to be met before insurance will cover certain costs. But this doesn’t necessarily mean that insurance will cover everything after that point. There could be co-pays and percentages only that are covered for certain costs, and knowing the maximum out-of-pocket costs you have to pay for both individuals and family can help to prepare and better budget for baby.
Knowing for example that the maximum per person out of pocket cost for an insurance policy is $2,500 (and bearing in mind that baby is a person two), might be a good indication that a safe budget number for mommy’s prep visits and baby’s arrival could reach the $5,000 mark.
But just because baby has arrived, it doesn’t mean those baby bills suddenly go away. In our case, not only did baby bills keep arriving for nearly a year after baby’s birth, but then there are all the costs involved in raising baby during year one and beyond.
Our costs over the first year for our second child for things like diapers, wipes, formula, breast pump supplies, clothing, baby food, toys, supplies, and all the rest came to over $1,000, and we were utilizing many of the supplies we had left from our first to reduce these costs. Buying store brand products for things like diapers, wipes, and formula also helped reduce our costs in this area.
Understanding how your work will or could be affected by having a baby before the time comes can be important to ensuring a continued level of income during time taking off for having a child. From finding out whether time off will be unpaid, how much time off you’re entitled to, whether vacation time will be used, how FMLA relates to your time off, and if you could be eligible for short-term disability and in what amounts could all be important factors to consider and understand ahead of time. How such time off will be used – whether you’ll take time before baby arrives, after, both or neither – could also come into play.
Considering such aspects before having a little one could save a lot of time, money, and effort after the fact.
More From This Contributor:
Building a Revenue Producing Blog
I Won’t Be Waiting to Take Social Security
Preparing to Publish My First E-book
The author is not a licensed financial, healthcare or parenting professional. This article is for informational purposes only and does not constitute advice of any kind. Calculations have not been verified by a professional. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.