Budgeting for being new parents

posted 11 months ago in Parenting
Post # 2
Member
9204 posts
Buzzing Beekeeper

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wildflower3 :  the birth costs are going to vary SO much based on your insurance. I had already met my deductible for the year when my daughter was born so it was only a $250 in patient co-pay. It will be the same for my son this spring. My husband’s employer provides our insurance and they only have single or family (no couple plan) so that was unchanged when we had kids as the two of us were already on the “family” plan which covers two or more people. 

As for leave I used short term disability plus my employer pays 8 weeks and I was able to also utilize a little PTO. With my daughter the rest was unpaid (I took 5 months total) and we just saved up for it. This time I’m taking roughly 14ish weeks (depending on when the kid comes) and so the paid leave I get covers our expenses for the whole leave and we’ll just pause putting money into savings for a few weeks. My husband gets 12 weeks paid by his employer – with our first we stacked our leave in order to buy us time until a daycare spot opened up. This time we have our spot and so we’re taking the summer off together. I’m a little salty that he gets more paid time off than I do considering he doesn’t have to grow a human, rip open his vagina birthing it, and then keep it alive with his boobs. 

The single biggest expense for us wasn’t healthcare or leave but CHILDCARE. It’s extremely expensive. When we started TTC I asked my best friend for her research on our local childcare costs, took the average, and started “paying” it to a savings account so we didn’t have budget shock when a baby came. That savings is how I paid for leave. I would say take any major expense that will change when the baby comes and start paying it to a savings account when you’re TTC. 

Post # 3
Member
9875 posts
Buzzing Beekeeper
  • Wedding: August 2012

I took 10 weeks. 6 was covered by short term disability through my employer, the rest I took PTO and a bit unpaid. We had extra savings just in case but it wasn’t an issue.

Insurance will vary a lot depending on your plan. Be very aware of what your deductible is, any co-insurance, and your max out of pocket expenses. If you’re on a single plan and are changing to a family plan after the birth, you may have a deductible to pay for the baby as well. They incur their own charges while in the hospital.

We didn’t find it hard to adjust financially, but we live below our means for the most part.

Daycare is the biggest drain on finances for us. More than $1000/month for one child.

Post # 4
Member
2648 posts
Sugar bee

As pp said the costs can vary wildly and it depends to large extent on your insurance. We had an OOP maximum of $6500 for each of us individually (shitty I know), so budgeted spending that much between prenatal appointments and the birth. We had reached our family deductible ($4500) before I gave birth, which meant had to pay 20% of the costs for everything after that…yet still ended up reaching the OOP maximum due to the expenses of giving birth and a hospital stay. I had an uncomplicated vaginal delivery and spent 2 days in the hospital. Since I gave birth toward the end of the year, the deductible reset shortly after I gave birth. Which suckedddd cause there are so many appts for newborns so we were SOL for those.

As for parental leave…lol. I’m a freelancer so I took two months unpaid leave and then went back to work part time. That is still what I’m doing, which works out cause we don’t have to pay for childcare as I’m able to be a Stay-At-Home Mom and also work 15-20 hrs a week. My husband technically gets 2 weeks leave with his work but they didn’t really honor that…he was back at work the day after we came home from the hospital. Don’t get me started. Luckily my parents flew up to help for the first two weeks, or I think I may have had a breakdown.

Post # 5
Member
399 posts
Helper bee
  • Wedding: June 2019

I got married last June and we are now expecting our first child. I have very good insurance through my job so there is no out of pocket cost for adding the baby to my insurance or prenatal care/labor/delivery.

Unfortunately, my job does not offer any type of maternity pay. I will be taking 22 weeks off. 4 before birth and 18 weeks after – a combo of pregnancy disability leave and CFRA (CA). With my current leave balance I should receive my full check for about 10 weeks, the rest will be unpaid. We have already saved for this.

I agree that the biggest financial cost is going to be daycare. In my area, it ranges from 1000 to 1500 a month. We can afford it but won’t be able to save as much as we’re used to. I have no idea how we’re going to manage when we have a second child. We’ll cross that bridge when we get there 🙂 

Post # 6
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9204 posts
Buzzing Beekeeper

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ohdarling :  we’re about to have two in daycare and a combination of (1) raises (2) the older kid getting cheaper as she moves classrooms and (3) agreeing to cut the budget hard and white-knuckle it for a year or two until the oldest is in kindergarten is how we’re paying for the increased daycare cost lol. It’s nearly $3,200/month for two and that’s fairly average in our area.

Post # 7
Member
230 posts
Helper bee

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wildflower3 :  I’m not in the US but would like to add my input/experience. 

Parental leave – unpaid by my workplace, but we pay towards an insurance fund the state provides that then pays you a percentage of your salary for a maximum of 4 months maternity leave. The percentage is actually not set and depends on your earnings. I was surprised by how much I got and it really helped. 

I took off the full 4 months, by a stroke of luck my little boy was born on the first day of my maternity leave so I got to spend the entire time with him. 

Birth/hospital stay – We are not on any medical insurance as private medical care is a luxury and at times unaffordable. We joined a birth plan that covered all antenatal checkups, birth and a few postnatal checkups for a set price. We didn’t have to pay anything thereafter. 

Health insurance – As mentioned above, we don’t have private health/medical insurance. For the one time my little boy was sick (he was 4.5 months old, currently 7 months old), we paid cash for his GP visit and medication. 

I will add that we are moving to another country for my husband’s work and his company will then be covering our health insurance while there. 

Also, I returned to work for 1 week after my 4 months maternity leave and resigned on account of relocating. I will be staying home with my little boy for an indefinite period of time for now. I feel really blessed that I am able to do this. 

Post # 8
Member
5843 posts
Bee Keeper
  • Wedding: May 2011

You left out a major one, childcare

My job increased their leave policy from 12 weeks paid to 16 weeks paid while I was pregnant so we had no planning/saving to do there

My husbands insurance at the time was insanely good. My vaginal birth was $300 and I think our monthly out of pocket as a family was $200. Now we’re on my much sh*ttier insurance due to a job change so we pay an extra $400 ish a month due to our family plan. I think a birth would run us $2-3k. We are debating baby #2 so we’re preparing by funding pretax spending accounts and earning the max in medical funds my company offers each year.

Daycare in the infant room was $1200/month. We were able to afford it by saving a little less than we were, salary increases and just less “fun” spending. We also started putting away $200/month for college. When daycare stops we’ll probably just ramp that up accordingly rather than start living like kings

Post # 9
Hostess
4739 posts
Honey bee
  • Wedding: November 2016

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wildflower3 :  We are planning to TTC next year, so I’ve researched all of these things to give myself something to do while we wait.  Daycare is our biggest expense, at ~2-3k/month, so we have been doing what 
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LilliV : suggested and putting that money into savings every month.  It’s definitely caused us to pay closer attention to our budget and cut out a lot of things – and the reason why we plan to be one and done. 

I read somewhere that you can ask your insurance provider for a pamphlet/list of the approximate out of pocket expenses related to giving birth – I’m not sure if all providers do this and have not asked mine yet, but figure it is worth trying if you want a ballpark.  I looked at my policy and got a general range, based on itemizing, but I’m not sure how accurate it is.  

I’m a Fed, so by the time we TTC, I will have 12 weeks of paid leave, and potentially additional time, if my supervisor permits.  Before the leave policy was passed, I had intended to take 12 weeks of saved annual leave/sick leave and have amassed a ton that I could potentially tack on.  

Health insurance will require us to go from self + one to family, which not a big expense.  

Post # 11
Member
551 posts
Busy bee

This is so hard to crowdsource information on because in the US there is SO much variation for what is available to people. One of my biggest frustrations with the way we deal with things in the US is that the people who have the best benefits through work are often those who need it the least – because good benefits tend to go hand in hand with high paying jobs.

My husband and I are both lawyers. With both of my pregnancies, I got / am getting (currently on leave) 5 months fully paid after birth. In addition, with my first I got 3 weeks pre-birth (also fully paid) for disability and with my twins, I took off 7 weeks before they were born, fully paid disability time. 

My entire pregnancies, including L&D, NICU time for my daughter, and all the crazy extra monitoring I required for twins, cost us nothing other than the $200/month we pay for the coverage. The $200/month covers all 5 of our family members. While it’s a high deductible plan, my company puts the amount of the deductible in an HSA for us each year, so our deductible is essentially zero. The plan would cost us nothing if my husband wasn’t eligible for health care through his job. 

The irony of course is that we both make enough money that I could have unpaid leave or high medical bills and we would be fine. We need fundamental change in this country to mandate paid leave and make healthcare more affordable to everyone. 

Our childcare costs are absurd, but that’s because we’ve gone the nanny route, have  3 kids age 2 and under, and currently have a night nanny because we decided the $$$ was worth it to save my sanity. 

Post # 12
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9204 posts
Buzzing Beekeeper

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wildflower3 :  It’s crazy to hear of employers outright offering paid leave

More and more companies are realizing that if they want to attract and retain top talent that paid family leave is a benefit they need to offer. When I asked for a longer leave with my first pregnancy one of the partners flat out told me “I’m pushing to get it for you because while it will be tough to be without you for an extra couple months I know that you could quit and get a new job really fast when you were ready. I’d rather lose you for a couple months than forever”. I never would have threatened that but I was glad he said it because honestly….that was my plan if they said no. 

For short term disability you need to be on the plan before you get pregnant otherwise they won’t cover it. My employer offers a plan (but I pay for it) and I just signed up when I started working since it’s good for more than just pregnancy. With two pregnancies I’ll have gotten more out of the plan than I’ve paid in but it’s only meh. The “6 weeks” for a vaginal delivery was really only 5 since the first week is an exclusionary period. My plan is 2/3 of salary but with a cap, and I cap out, so it’s actually less than 50% of my salary.

ETA: all of my birthing costs mentioned above are because I stay in plan. If I went into early labor out of state and ended up hospitalized I’d be properly screwed. We went on a few weekend getaways during my second trimester and I made sure to know (1) the closest hospital in the event of a true emergency and (2) the closest in-network hospital if something went wrong but I had more time to drive. 

Post # 13
Member
1301 posts
Bumble bee
  • Wedding: July 2019

No baby yet, but I’m currently 25 weeks pregnant.

–Parental leave: I get the standard 12 weeks of FMLA. It’s unpaid, but my employer requires me to use my banked PTO during my leave. I have an excess of 12 weeks’ worth of PTO saved up, so I’ll get my full salary while I’m out. I plan to return to work because I like my job, I like making my own money and saving for retirement, we enjoy having a double-income home, and I have really good benefits through my employer.

–Birth/hospital stay: This will depend on whether I give birth vaginally or via c-section. I’ll obviously be required to stay longer if I end up needing a c-section. My OB’s office quoted my out-of-pocket expense for birth/hospital stay to be right around $1500 after insurance, provided everything goes as planned (which it rarely does). My out-of-pocket maximum is $3000, so that’s the absolute most we’d be responsible for.

–Health insurance: I have a family insurance plan through my employer, which currently includes my husband, my stepson, and myself. It costs me $260/month. There is no cost to add additional dependents, so our insurance premium will stay the same once we add the baby. If I were still on a single plan, it would cost about $161/month more to upgrade to a family plan and add the baby. My husband has an FSA through his employer, so we will use to that to cover any out-of-pocket expenses we can related to baby/post-partum care.

Post # 14
Member
5843 posts
Bee Keeper
  • Wedding: May 2011

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wildflower3 :  I’m in finance at a Fortune 100 company, we did it to remain competitive with tech companies offering more generous leave. We also offer partial surrogacy reimbursement now

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sandiegobee :  same here, while I am very grateful for my experience it is incredibly upsetting how we as a country decide who “deserves” these benefits.

Post # 15
Member
932 posts
Busy bee
  • Wedding: August 2016

Leave: I was lucky enough (in the US) to have 14 weeks paid and then return to work part time for several more weeks. It is infuriating that paid leave isn’t standard here.

Insurance: Having a baby is expensive! My plan has a $4,000 out of pocket max per individual with 25% coinsurance. I had a vaginal delivery, standard 2 night stay, and complication free pregnancy and it cost me over $3,000, including all prenatal care. My son was added to my insurance (premium is around $170 extra per month), but he was born quite early. He spent 5 weeks in the NICU, so right off the bat we had an extra $4,000 bill. We had good savings, but it was one of those situations I never dreamed I’d actually experience so it is certainly worth factoring that possibility into your savings plan.

As others have mentioned daycare costs are astronomical and we are lucky enough to have a situation where we won’t need to put him there until he is older. Without daycare, he hasn’t made a big dent in our month to month budget yet besides the insurance.

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