 TITLE: How to Financially Prepare for Children CONTENT: Understand What Your Health Insurance Does and Doesn't Cover\n------------------------------------------------------------\nNo matter how you start your family, you need to review your health insurance early and thoroughly to understand what it covers—and what will have to come straight out of your pocket. Here's what to look for:\n*   **Your deductible**: You must spend your deductible before maternity care coverage kicks in.\n*   **Expected coverage**: Check what coverage your plan offers for prenatal vitamins, lab tests and the birth itself.\n*   **Unexpected coverage**: About 8% of pregnancies don't go exactly as planned. Be sure you review how your provider handles expenses like NICU visits and potential visits to out-of-network doctors.\n*   **Partner's plan**: Your partner's plan may have benefits better suited for your family's needs, especially for when you add your new dependent to your insurance. There may even be additional perks, like college tuition benefits, included in your plans.\n*   **Surrogacy, adoption and IVF coverage**: Certain insurance plans extend to surrogacy or fertility treatments, though the coverage may be limited.\n*   **Flexible spending accounts or health savings accounts (FSAs and HSAs)**: An FSA or HSA can help you put money toward health care while reducing your taxable income. Make sure you check the details and maximize these options if your employer offers them.\n*   **Critical illness insurance**: Some diagnoses could incur high added costs; you may want to secure accident or critical injury insurance in advance to help you cover the unexpected.\n*   **Exclusion period**: Some plans won't cover maternity costs until you've been with your provider for a certain period.\nReview Your Maternity and Paternity Leave\n-----------------------------------------\nDepending on your employer, length of employment and other factors, you and your partner may be eligible for leave from work according to federal and state provisions. However, there's a good chance it won't be _paid_ time off.\nBe sure to review your maternity or paternity leave coverage with your employer and state well in advance. Then, strategize how much time you intend to take off work, depending on your family and budget.\nKeep in mind that the time you need to spend away from work for a new child can be unpredictable. Pregnancy complications like extended bedrest can disrupt even the best-laid plans. It may be a good idea to save up paid time off, like sick days and vacation time, to cover any unintended interruptions to your or your partner's paycheck. You can also consider short-term disability insurance, either independently or from your employer, to help cover potential rough patches.  \nAdjust Your Budget to Include a Child\n-------------------------------------\nThe earlier you start to budget for a new family member, the better. But how do you effectively approach a budget? There are several budget strategies, like zero-based budgeting and the 50\/30\/20 rule. Try out different techniques and stick to the one that works best for you. You should track all your expenses, from monthly bills to miscellaneous money habits, and start making room to include a child:\n*   **Pay down debt.** Birth and child-rearing are expensive enough; make it a priority to ditch any debts you have (particularly high-interest debts).\n*   **Pad your emergency fund.** The golden rule is to have enough set aside to cover three to six months of living expenses. Consider keeping your savings somewhere safe and add to your stash over time with automatic deposits from your checking account.\n*   **Cut down on expenses.** If you can switch your gym membership to free home workouts or pack a lunch instead of eating out, now's the time. Every dollar you put away or put toward your financial goals will help you prepare for the financial needs of having children. You can even enhance your saving superpowers with a side gig (bonus points if you can keep up your side hustle from home after the baby arrives).\nHow Much Money Should You Have Saved for Children?\n--------------------------------------------------\nNow that you know how to get a budget going, it's time to put everything together and figure out how much you'll need to be genuinely financially prepared. On average, raising a child costs almost $13,000 each year.\nYour exact expenditures will depend on choices like school, childcare and lifestyle. When you crunch the numbers for your budget, try to look ahead to such costs so you can feel confident about your long- and short-term financial plans.\nThink about the money you need for pregnancy, adoption or surrogacy, and then determine other important costs for after the baby arrives. You can start putting aside college savings for your child with tax-advantaged 529 plans or programs like Upromise, which boosts your spending with rewards for your child's college fund.\nIn the process, don't forget about contributing to your retirement savings regularly. Even if you have to reduce your contributions temporarily, setting as much aside as possible now means your child won't have to shoulder the cost of caring for you later.\nIf you need to take on debt to bring your child into your world, aim to take on the right kind of debt. Keep your credit in tip-top shape to help you qualify for the best loan rates if you end up needing to borrow money—or, if your credit isn't currently ideal, take steps to improve it now. For fertility treatments, LGBTQ couples and surrogacy, check out possible grants to help with the costs; there may be financial aid for adoption available to you, too.  \nThe Bottom Line\n---------------\nNo matter how a child arrives in your family, you'll have financial responsibility for them for many years to come. It can feel a little overwhelming, but the right preparation can help keep you on track financially throughout your child's life. END