Congratulations! While you’re planning for the arrival of your first child, consider these essential topics. Even if you’re already a parent, give yourself a double check as you prepare to welcome your newest baby. Feel more confident that you have a plan that fits your family.
Learning Points: Planning for Your First Child
Interviewing and Choosing Your Child’s Pediatrician
IF YOU ARE PLANNING FOR YOUR FIRST CHILD, you’ll want to start searching for your pediatrician between three and six months before your due date. Your health insurance company should have an online resource available for you to search for in-network providers.
Talk with friends and family about what pediatricians they use or recommend, too.
Narrow down a short-list of potential in-network pediatricians. Then, consider how much you value the following factors:
- Professional Credentials: Board certification, training, and hospital affiliations.
- Location(s), Hours, and Availability: How easy will it be for you to get to and see your pediatrician? For example, is your doctor available over the weekend?
- Philosophy of Care and Milestones: Discuss what type of care the pediatrician recommends (e.g. visit cadence, vaccination schedule, unplanned/sick visits, etc.) and what you should do if additional, unexpected care becomes necessary. How many well-child visits should you anticipate?
- Personal Connection: You’ll feel better working with a pediatrician you feel comfortable around and trust.
When in doubt, trust your instincts.
You’re more likely to see your pediatrician (and the other professionals in their group) more frequently in the early years of childhood.
If that means choosing a pediatrician who is out-of-network and who can provide the right care for your family, you’ll want to understand how that choice fits into your savings priorities.
Estimated Prenatal, Delivery, Post-partum, and Postnatal Costs
WHEN YOU’RE PLANNING FOR YOUR FIRST CHILD, you can estimate the total cost of care before, during, and after delivery. Knowing these costs can help you financially prepare to welcome your newest family member. Keeping the focus on the health of the mother and the baby is everything. One of the last things you want to find yourself worrying about is the cost.
You may already have experienced the chaotic symphony of people who help deliver your child. While it can sometimes feel like a seamless team, remember that each group will charge you separately for their services. Your specific experience will vary depending on a variety of factors. For example, how you deliver your baby and your insurance coverage.
CONSIDER the following groups who might help you deliver or play a role in your overall care when you’re planning for your first child:
- Obstetric and Gynecologic professionals
- Anesthesiologist and Certified Registered Nurse Anesthetists team
- Hospital nursing staff, facilities, and professional staff (i.e. laboratory and pharmacy charges)
- Pathologist
- Pediatric professionals
AS A NEXT STEP, you can request a written cost estimate for medical procedures and treatments from your health insurance company or directly from your providers. Your health insurer can work directly with the health care providers to get the additional information needed to complete your estimate request.
Your written cost estimate will be guided by details like each group’s Service Provider NPI (National Provider Number), Procedure Codes, and Diagnosis Codes.
This is simply an estimate of the total cost of care that you will owe and how much your insurance company will cover.
The final numbers will vary depending on your delivery experience.
Once you know how much you can expect to pay, you can start saving for this happy day.
CONSIDER AUTOMATING HOW YOU SAVE FOR THIS PRIORITY with a dedicated account.
Break down how much you need to contribute from each paycheck and create automated transfers between your accounts.
LOOKING AHEAD, you can expect your insurance provider to send you a separate Explanation of Benefits (EOB) for you and your child after your delivery experience. The EOBs will show how much a service provider billed your insurance company.
The EOB should detail any discounts, allowable amounts, as well as the copay and coinsurance amounts you will owe.
Then, after several weeks, the healthcare provider will send you an invoice showing the summary details of the treatment you received. It can be helpful to then request an itemized statement from the healthcare provider detailing all the charges so you can verify their accuracy.
THE TAKEAWAY FROM THIS TIMELINE IS THAT YOU HAVE an extra month or two to save after your baby arrives.
Review Health Insurance Coverage
FROM YOUR HEALTH INSURANCE PLAN’S PERSPECTIVE, the birth of a child is considered a “Qualifying Life Event”.
This means that you can elect to change your health insurance coverage after your child is born. Under normal circumstances, you would need to wait for the next open enrollment period to update your health insurance coverage.
As such, when you’re planning for your first child, evaluate whether your current health insurance coverage benefits provide your family with the right coverage.
You’ll want to understand how all of your different health plan options best fit your family. This could mean the full family coverage through your spouse/domestic partner’s employer is a better choice, even if you currently use a plan through your employer.
When you’re planning for your first child, evaluate your healthcare options based on variables such as:
- Bi-weekly premium deducted from your paycheck
- In-network and out-of-network deductibles
- Out-of-pocked maximums for in-network and out-of-network care
- Anticipated future usage
- Family medical history
Reviewing your complete terms of coverage provides you with all the details, and costs, of the plan.
Or do you feel you’re better selecting a high-deductible plan and contributing to a Health Savings Account (HSA)? HSAs have distinct advantages and disadvantages.
Depending on whether you want your HSA to fund a short-term need or a long-term goal, don’t let the tax advantages of an HSA to be your only guiding factor.
Back to the concept of a “Qualifying Life Event”, there are other, similar family milestones that fit into this definition, for instance:
- Adopt a child or children
- Become a foster parent
- Become a legal guardian
Daycare Waitlist and Estimated Costs
IF YOU ANTICIPATE THAT YOU WILL SEND YOUR CHILD TO DAYCARE, finding the right provider/environment takes time.
When you’re planning for your first child, you’ll also want to determine how you’ll pay your daycare provider. Like researching your pediatrician, finding the right daycare solution for your family might not be the cheapest or most efficient. You can start by exploring different options recommended by friends and family with recent experiences. Here are some additional ways to evaluate your options:
- Qualifications and Caregiver/Teacher-to-Student Ratios
- Educators, Curriculum and Learning Environment: How is the curriculum structured for age-appropriate development through play, exploration, and social interaction? Is the environment clean, stimulating, and well-equipped?
- Costs and Expectations: How does the daycare center charge for its service? For example, is it an hourly rate, a day charge, or a flat monthly fee to attend? Don’t forget staff/teacher appreciation and holiday gifts. Review the parent handbook to learn whether there is any volunteer team required throughout the year.
- Hours and Annual Calendar: When does the daycare center close for holidays, bad weather, or other reasons? How do the hours support your family’s lifestyle and goals? What happens if you get stuck in an unexpected call or meeting? Review the daycare’s annual calendar and evaluate how that aligns with what you want for your child.
When you’re planning for your first child, consider exploring additional opportunities to help your child grow and develop. For example, is there a local Parents-As-Teachers or similar organization in your area? This can help parents with purposeful, age-appropriate training and curriculum. It can also help give you peace of mind by screening your child for development delays.
If you’re considering hiring a personal nanny or night nurse, there are a number of different costs, taxes, and considerations outside the scope of this piece.
The Next Step
When you know who and what are truly important, you can create incredible clarity about your spending and saving.
Clarity to confidently spend on things that matter. Clarity to avoid spending your hard-earned resources on things that aren’t aligned with what you want in life.
As your financial planner in Saint Louis, we can help you plan for the future and enjoy the present moment.
Start feeling more confident that you are making progress toward your savings priorities and planning for your first child. Once you know which pre-arrival planning items you want to tackle, set aside time on your calendars to start making progress on what you want to achieve.
Proactive and open collaboration with your financial, tax, and estate planning professionals can help you work towards your financial goals. Working with your financial planner in Saint Louis can provide you with the right mix of accountability, collaboration, and long-term thinking.
If you’re unsure about your next step, let’s talk.
Disclosure
This commentary is provided for educational and informational purposes only and should not be construed as investment, tax, or legal advice. The information contained herein has been obtained from sources deemed reliable but is not guaranteed and may become outdated or otherwise superseded without notice. Investors are advised to consult with their investment professional about their specific financial needs and goals before making any investment decision.