Managing Debt With Baby On the Way

A baby on the way means big changes, not just to your household but also to your finances as well. What are the extra expenses you can expect? The expert credit counselors at Consumer Credit Counseling Services (CCCS) agencies like ours help you identify your goals and determine the best strategies for achieving them BEFORE your baby arrives.

Planning for Baby

Even if you are not yet pregnant or even thinking about becoming pregnant, it is still very important to work on your debt management skills. Having a child is an expensive endeavor, so reducing your debt now will help you prepare for the financial responsibility that parenthood requires. An expert credit counseling service can work with you on ways to best manage your finances and reduce your debt in the shortest possible time.

Before Baby Arrives

If you are thinking of having a child, it is a good idea to find out what your health insurance policy covers. Credit counseling experts warn that medical costs can overwhelm some couples, especially those with existing debt management issues. Some insurance plans require you to pay up to 20% of the delivery cost, which could be anywhere from $8000 to $10,000. Those costs will rise rapidly if any complications arise.

What is your company's policy on maternity leave? A typical short-term disability plan pays you 60% to 70% of your gross income for a period of six weeks. That can be a sizeable decrease in income. If you are struggling to maintain your budget on your own, a credit counseling expert can help you find ways to adjust it to best fit your needs. Also, your employer may provide a flexible spending account for medical costs. If so, take advantage of it to save money for any potential uninsured costs that may arise.

Plan ways to save money on baby supplies. Babies grow quickly, so consider whether or not it is worth buying the most expensive car seats and clothing. Bargain hunting can really pay off, and babies don't care how much their clothing costs!

Managing Debt After Baby Arrives

Once your child is born you will have deal with the cost of childcare. This will be a critical part of your budget, particularly if both parents intend on returning to work. If you know that you will be going back to work and will need money for childcare, consider talking with a credit counselor about how to best budget for this new expense.