Your 9-Month Financial Prep Plan for Becoming a Parent

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baby budget

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Those who are planning for parenthood have a lot to look forward to. But along with anticipating newborn coos and baby smiles, they should also be preparing their baby budget.

“Having a baby is a beautiful, joyful, and often expensive endeavor,” says Ashlee Neuman, a senior editor for The Bump.

With the right preparation, however, you can get your finances in shape and plan for your baby on a budget. Here’s a month-by-month financial guide to prepare for parenthood.

Month 1: Research your health insurance coverage

If you’re planning to conceive or are newly expecting, learn how your insurance covers maternity costs. “Now’s the time to read up on what’s covered under your insurance policy and what’s not, like screening tests, vitamins, doulas, and more,” says Neuman.

Research your plan’s maternity coverage

For companies with 15 or more full-time employees, the employer-sponsored health insurance plans must include maternity coverage, Neuman says.

“What’s specifically covered by your insurance will vary based on your insurance carrier and your plan, but you can expect anywhere between 25 and 90 percent of costs to be covered,” she adds.

It’s possible your insurance plan might not cover maternity costs at all. “If you have an individual insurance policy that’s not offered through an employer, odds are it won’t cover maternity costs,” Neuman points out.

Switch to a health plan that covers more costs

If your current plan is lackluster, consider making a switch during your employer’s next open enrollment period for insurance. It’s possible that switching to an HMO or “pay now” model of health insurance could save you thousands.

With my second baby, my husband and I made the switch knowing that I’d have some major health costs coming up. While some of our copays were higher, I had a much lower deductible on my health costs. I was even more grateful for the savings when my newborn spiked a fever and had to be admitted to the hospital for a week.

Month 2: Calculate out-of-pocket health costs

There are plenty of expenses that come with a baby, but your health costs will be some of the biggest — and the ones that you’ll encounter first.

Now that you have an idea of what your health plan will cover and what it won’t, you can start budgeting and saving for your maternity care.

Budget for prenatal care

Prenatal care will include plenty of check-ups, as well as a lot of lab tests, ultrasounds, and other diagnostics services. You’ll also want to pick an OB-GYN that you can trust and is in-network.

Look at what you’ll be responsible for paying out-of-pocket at each visit or for each test. Work these costs into your budget to make sure you can cover them.

Start saving for labor and delivery

You’ll also want to start researching and comparing the costs and services of hospitals at which you could deliver. Labor and delivery are typically the biggest medical expense of having a baby.

“Don’t be afraid to ask hospitals what they charge for delivery and postnatal care, and opt for in-network facilities to avoid out-of-pocket expenses,” Neuman says. “The good news is you have time to shop around for competitive rates.”

But remember, “Exactly how much you’ll pay depends on where you live, what insurance you have, and if any complications arise,” says Neuman. Average costs for a vaginal delivery are $8,775 and even more for a cesarean section, though costs vary widely by location.

Month 3: Scale back expenses

Once you know what costs you’ll be facing right away, it’s smart to review your spending and baby budget. Your lifestyle will change radically when you become a parent. Cutting back on spending now can ease the transition to parenthood.

A great place to start is by looking for ways to spend less on fixed monthly costs like rent, utilities, and debt payments. You can cut out some of these recurring costs if they’re unnecessary, like canceling the cable bill or downgrading to a cheaper package.

You can also look for non-necessities that you’re overspending on. Cut back on nights out on the town (this is easy when you’re pregnant and can’t drink anyway). Skip a hair trim or color. Stick with your current smartphone rather than upgrading to the newest model.

Month 4: Save as much as you can

After trimming your budget, start socking away the extra funds in your budget. You’ll need that money in the coming months to cover everything from bottles and diapers to your loss of income during your maternity leave.

With my first child, I also knew we’d also need a bigger place than our one-bedroom apartment, so I added an apartment deposit to my budget as well. With parenthood on the horizon, other parents-to-be might want to save up for a down payment on a more child-friendly car or start beefing up an emergency fund.

You don’t have to have everything figured out at this point, but estimating your future costs and how much you need to start saving for a baby can keep you on track.

Month 5: Plan for parental leave

By now, everyone’s probably heard the news about your new arrival. One of the questions I got most often was what my job plans were once the baby arrived.

How much time was I taking off? How early was I going to start maternity leave? Was my husband going to take time off to be with the baby?

Knowing what I could plan on made it easier to weigh my options and figure out what would be best for my family.

Know your rights as a new parent

“It’s never too early to brush up on your employer’s parental leave policies and your rights under the Family and Medical Leave Act,” Neuman says. Under the FMLA, both parents are entitled to up to 12 weeks of unpaid job protection if you work for a company with 50 employees or more.

As a California resident, I was also entitled to benefits through the state’s Paid Family Leave insurance program and I could take an additional six weeks of maternal disability leave. Make sure to check your state to see if it offers any additional benefits or protections for new parents.

Meet with your human resources department

You’ll also want to review your company’s policies and benefits for parents, as well as meet with human resources to discuss them. Make sure to ask if they offer any paid parental leave or what kind of parent-friendly policies they have in place.

“Figure out how much paid time off you’re entitled to and whether you’ll be taking any unpaid leave so you can start budgeting and saving well in advance,” Neuman suggests.

Month 6: Take out insurance policies

Parenthood is a huge responsibility. With a new life counting on you, it’s important to make sure your child will be provided for no matter what. That’s why Neuman suggests that expecting parents take out life insurance policies.

As for how large a policy to get, most financial experts recommend eight to 10 times your annual salary — although depending on your circumstances, you may want to up that amount,” she suggests.

Expectant parents might also benefit from holding disability insurance, “in case you find yourself unable to work for a while,” Neuman adds.

You might have life insurance or disability insurance (or both) through your employer. “Expectant parents should take a look at their benefits to determine whether the amount would be enough to get you through several months without income,” Neuman says.

Month 7: Start looking and budgeting for childcare

By now you probably have an idea of how long you plan to stay home with your child, and if you’ll need childcare to return to work. “Plenty of parents expect to take on childcare costs, but many may not realize just how expensive it can be,” Neuman says.

Start looking at childcare in your area. Depending on where you live, you might need to claim your spot on a waiting list well before your baby arrives.

You can also get an idea of the costs you’ll be facing and start carving out room for this expense in your post-baby budget. “In most states, daycare center fees equal more than 10 percent of a two-parent family’s income,” Neuman says.

When planning for childcare costs, you can also revisit your work benefits to see if any can help with covering childcare costs. My husband’s employers offered an FSA for childcare, for instance, allowing us to save by paying for daycare with pretax dollars.

Set up a post-baby budget

You’ve already made some adjustments to your budget, but this is a good time to revisit it and make sure you’re accounting for all your costs.

“The average middle-income family spends about $12,000 on child-related expenses in baby’s first year of life, according to a 2010 report from the US Department of Agriculture — and for many, that number is even higher,” Neuman says. In general, you should be budgeting for at least $1,000 in extra costs each month.

If you’re not sure how much to save for a baby, do your research! “There are several tools out there to help families figure out what they’ll need to budget for, like The Bump’s Baby Budget Checklist, which breaks down one-time and monthly expenses parents should plan on,” Neuman adds.

Month 8: Start stocking up

You’ve reached the stage where friends and family members are starting to feel generous. Don’t be shy about expecting help from people who want to help you in this big life change.

If you haven’t set up a baby registry already, now’s the time to do so. After your baby shower takes place, you can fill in the gaps. Some retailers, like Amazon and Target, will give you a discount when you purchase items from your baby registry.

Know what’s a must-have and what’s not

Even if you get a discount, you should be choosy about what you buy.

“There’s a long list of baby gear you’d be smart to invest in — and then there are products you can safely skip,” Neuman says. Expectant parents can feel free to skip items of convenience but not necessity, like nursing pillows, bottle sterilizers, and bottle warmers.

“To get the most bang for your buck, choose items that are versatile and can grow with baby,” Neuman adds. Look for creative ways to reuse or repurpose items as baby grows. For instance, she says, “There’s no need for a changing table when a regular dresser with a changing pad on top will do!”

Month 9: Welcome baby

Now that your baby’s arrival is imminent, all the preparation you’ve been doing will pay off — but there are still some things you will need to do.

Finalize your paid leave and cash out vacation days

If your employer or your state provides paid family leave, set everything up now to ensure you’re taking full advantage of these benefits. Post-baby life will be so hectic that you can easily forget to follow up on important items like these — make sure everything is in place now so you can get the pay you are due.

Choose an in-network pediatrician

The last month of pregnancy is also a great time to find a pediatrician in your network. You can get recommendations and even meet with a few to discuss your parenting approach and find a good match.

Once your baby is born, you’ll also need to add your child to your health insurance. Many insurers have a strict window after birth during which you can add the baby to your coverage.

Get your baby’s birth certificate and Social Security card

Most hospitals will have a records specialist who will come by your room post-delivery. This person can help you fill out the forms for a birth certificate and a Social Security card for your new baby. You might need to pay a fee to file these documents.

Having a baby is definitely expensive and stressful, but it’s also one of the most rewarding experiences in life. By financially preparing for parenthood, you’ll ensure that you’re able to enjoy your new baby instead of stressing over money — and that’s priceless.

Interested in refinancing student loans?

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1 Important Disclosures for Earnest.

Earnest Disclosures

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit, email us at, or call 888-601-2801 for more information on ourstudent loan refinance product.

© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.

2 Important Disclosures for Laurel Road.

Laurel Road Disclosures

Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.

Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.

Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.

Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.

3 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance:Fixed rates from 3.899% APR to 7.804% APR (with AutoPay). Variable rates from 2.470% APR to 6.990% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.470% APR assumes the current index rate derived from the 1-month LIBOR of 2.08% plus 0.64% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score.
  2. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (

4 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.

5 Important Disclosures for CommonBond.

CommonBond Disclosures

  1. Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). The following table displays the estimated monthly payment, total interest, and Annual Percentage Rates (APR) for a $10,000 loan. The Annual Percentage Rate (APR) shown for each in-school loan product reflects the accruing interest, the effect of one-time capitalization of interest at the end of a deferment period, a 2% origination fee, and the applicable Repayment Plan. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment, which is reflected in the interest rates and APRs displayed. Variable rates may increase after consummation. All variable rates are based on a 1-month LIBOR assumption of 2.08% effective July 25, 2018.

6 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate DisclosureVariable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of October 1, 2018, the one-month LIBOR rate is 2.22%. Variable interest rates range from 2.72%-8.32% (2.72%-8.32% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.75%-8.69% (3.75%-8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit We also have several resources available to help the borrower make a decision at, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled. Applicants with an Associate’s degree or with no degree must have made at least 12 qualifying payments after leaving school. Qualifying payments are the most recent on time and consecutive payments of principal and interest on the loans being refinanced. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a cosigner who is a U.S. citizen or permanent resident. The cosigner (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a cosigner will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.
  7. Estimated average savings amount is based on 14,659 Education Refinance Loan customers who saved on loans between August 1, 2017 and July 31, 2018. The calculation is derived by averaging monthly savings across Education Refinance Loan customers whose payment amounts decreased after refinancing, calculated by taking the monthly payment prior to refinancing minus the monthly payment after refinancing. We excluded monthly savings from customers that exceeded $4,375 and were lower than $20 to minimize risk of data error skewing the savings amounts. Savings will vary based on interest rates, balances and remaining repayment term of loans to be refinanced. Borrower’s overall repayment amount may be higher than the loans they are refinancing even if monthly payments are lower.

2.47% – 6.99%3Undergrad
& Graduate
Visit SoFi
2.47% – 5.87%1Undergrad
& Graduate
Visit Earnest
2.47% – 8.03%4Undergrad
& Graduate
Visit Lendkey
2.95% – 6.37%2Undergrad
& Graduate
Visit Laurel Road
2.48% – 6.25%5Undergrad
& Graduate
Visit CommonBond
2.72% – 8.32%6Undergrad
& Graduate
Visit Citizens
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