Since we’ve blogged about prenups and weddings, we wanted to briefly discuss the next step in the life cycle: having children. Financially speaking, here are a few things you might consider before your little ones arrive.
1. Check Your Insurance Benefits: If you have medical insurance you might determine if there are provisions in your policy that pertain to your impending parenthood. For example, you might be due a pregnancy benefit or you might be eligible to collect disability payments. In any event, be sure the policy will cover you while you’re expecting. Some insurers require that you buy the policy three months before you become pregnant*.
2. Review Your Tax Options: If memory serves me correctly, you may be eligible for at least two tax credits. The first credit reimburses you for monies you spent on child care. The amount of this credit depends on your income and how much cash you dropped on day care, check the IRS’s website for more info. Second, you might be eligible for $1,000 credit just for having children, but don’t take it from me, you should also ask the IRS.
3. Save Money: Wherever you decide to have your child, there will be a bill. Even if you are insured, your policy probably won’t cover 100% of the birthing costs. A friend of ours recently had twins, which necessitated that his wife spend 4 days in the hospital. The total bill was $20,000. He was fortunate because his policy covered everything, but I’d bet yours does not. – You might consider saving up so you won’t be unexpectedly by a big bill.
*Jane Bryant Quinn, Making the Most Of Your Money