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 you get pregnant.

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.

Best,

James

*Jane Bryant Quinn, Making the Most Of Your Money

MANAGE YOUR MONEY TOGETHER

Here are some simple guidelines for DINKS to build wealth:

1) Collaborate: Meet regularly to talk about money, set goals together, track and monitor them.

2) Understand and respect your partner. Take time to understand your partners values about money.

3) Watch the numbers. Get a budget, monitor your spending and track your net worth.

4) Max your retirement. Maximize contributions to your tax deferred retirement accounts.

5) Invest in stock. Stocks perform better than bonds or cash.

6) Avoid high interest debt. Credit cards and title loans are financial cancer.

7) Diversify. Don't put all your eggs in one basket.

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