How to Pay for a New Baby

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Getting ready for a new baby doesn’t only require a lot of at-home preparations, but you have to be financially ready for all the costs that come with a baby. Not only are there costs to raise the baby, but there are also medical costs, financial plans for when you take leave, budgeting, and other things. One thing we never learn in school or through life experience is how to pay for a new baby. That’s why we’ve come up with the different resources you’ll need like:

  • Pre-delivery budgeting
  • What to expect with/without insurance
  • Where to get insurance
  • How to reduce the costs for a new baby

Pre-Delivery: Plan Costs for a New Baby

Once you find out you’re pregnant, you probably have a lot of things going through your mind and a whole checklist. The first thing to do is just take a breath and remind yourself you’ve got this. There are a few things you’ll want to plan for financially that will help make post-delivery a lot easier.

Health Insurance and Anticipated Costs

Even with health insurance, having a child can be expensive. Figuring out the costs to expect early in your pregnancy will help you prepare for the delivery. Learn about the medical costs for prenatal care, labor, delivery, and the bills to follow for baby.

Maternity/Paternity Leave

Find out the maternity or paternity leave situation with your employer. Figure out how much paid time off you’ll receive and if that payment will affect your finances. Know your state laws and company policies when it comes to maternity/paternity leave.

Draft Pre-Baby Budget

Once you’ve figured out how much medical expenses you’ll have to pay out of pocket, what your income will be during your leave, and after you’ve shopped for all the necessities, adjust your budget accordingly. Figure out how much you’ll need to save, and where you can cut corners with bigger purchases. Buying used might not be ideal, but you can find barely used items for a lot cheaper than brand new for baby items they’ll grow out of quickly.

Plan Post-Delivery Budget

After you’ve delivered and come home with baby, the last thing you want to think about is finances. Creating a post-delivery budget will help everything run smoothly when it comes to paying for reoccurring costs like diapers, food, and child care. Things like that will change your budget, so it helps to plan ahead.

Check Emergency Fund

If you don’t have a “rainy day” fund, now is the time to start one. Kids are accident prone, and with all the other costs of a child, it’ll be hard to handle it all based on your disposable income. The rule of thumb is to have at least 3-6 months of living expenses covered in your savings.

How Much Are Costs for a New Baby

It’s hard to pinpoint the exact costs for a new baby because they vary radically based on:

  • Where you live
  • Any complications during delivery
  • Natural vs. c-section
  • Your insurance coverage

The costs for a new baby can range anywhere from $9,000 to $250,000 which sounds like a drastic difference. That number is without insurance, so your insurance has the potential to cover the bulk of the expenses.

Costs for a New Baby with Insurance

Employee plans can help you cover anywhere from 25% to 90% of the costs. But, that percent will also depend on your deductible. It’s important to know your coverage policy for having a baby, and if you have it through your employer, the human resources department can help you figure it out.

To help you save on the costs of a new baby, make sure to:

  • Notify the insurance company within 30 days of the baby’s birth
  • Find out the maximum amount of time in the hospital covered by your insurance, and try not to stay any longer
  • Stay in-network with your hospital and OB
  • Understand your insurance plan from the deductible, to copays, to out of pocket maximums.

Cost for a New Baby without Insurance

If you or your partner do not have insurance, there are a few places you can look to get it:

  1. Medicaid – a federally funded program for low-income families and individuals.
  2. State programs
  3. gov – you can find federally funded health centers that provide basic medical care on a sliding scale basis.
  4. COBRA – offers continuation of coverage to people and families who lost benefits because of job loss or other circumstances.

How to Reduce the Costs of a New Baby

  1. Shop and look at hospitals in your network that have the better costs.
  2. Consider birthing centers or at home birthing. They can be half the costs of a hospital or more, but it will mostly be out of pocket.
  3. Negotiate with your hospital’s financing department to see if they offer discounts for uninsured individuals or set up payment plans.
  4. Take generic medication and work with your OB to get the alternative, generic prescriptions.

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1Loan approval is subject to meeting the lenders credit criteria, which may include providing acceptable property as collateral. Actual loan amount, term, and Annual Percentage Rate of the loan that a consumer qualifies for may vary by consumer. Loan proceeds are intended primarily for personal, family and household purposes. Minimum loan amounts vary by state. Consumers need to demonstrate ability to repay the loan.

2Based on consumers who received a loan from LoanMart from February 2002 to October 2018.

3Application processes could take five (5) minutes to complete. Upon completion, a conditional approval may be given pending review of documentation. Funding time is based on the time from final approval following receipt and review of all required documents and signing, prior to 2PM PST on a business day.

4To exercise the right to rescind, the consumer(s) must notify the lender in writing by midnight on the third calendar day from obtaining the loan. Within one business day from notice of rescission, the consumer(s) must return any monies received and fees paid on behalf of the consumer(s) by certified funds.

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