#261 – Family expanding: How to Financially Plan for New Baby Expenses

Welcome back to the money, boss, parent podcast. I have really personal and really exciting news to share with you today. We are growing our family, and I know I've been keeping a big secret, but I'm excited and thrilled to announce that we are expecting our baby number two, and yes, it's a girl. So it's coming very quickly, or for us, don't know where the time went, but so much goes into preparing for having the child. So I wanted to jump back in, because I've been there before. Liam, my son, who is almost six years old, was born just about six years ago, and it took me a while to kind of get my head wrapped around and figure out some of the financial things that I wanted to do the best and granted, I didn't have it all lined up for him or before he was born. And so I love that episode that I shared with you that long ago. I went back and re listened to it, and guess what? As the time went by, these things are so good, these topics and ideas and conversations, they are evergreen. They're withhold the time. And so as I prepare for this next chapter, I thought it would be really good time for us to revisit it and where I share some of the essential steps, financial steps, to take before the baby arrives, and as you are welcoming your first baby, your second baby, or maybe even your third baby or the fourth so wherever you are, I'd love to hear from you, but today I want to focus with you on what can you do in these sort of before and after phases? And as we timing of all of this is awesome for us, because we're kind of heading into the holiday season. But regardless, it's such a journey that every parent, every family goes through. And I want to kind of tackle head on, what are the financial things we need to do and what emotional things we're going to be dealing with is it, does it get easier? Is you have your second child? I don't know. I'm just about to find out in all of the logistics too. But guess what? It is so rewarding. It is so exciting. And so I'm really like navigating it as I go, but I have a checklist. I It's been really awesome because I went back and I was like, What did I say? What did I do? Somehow the last five years kind of just like, went away in terms of remembering right? And I'm hoping it's like riding a bicycle that you kind of like, get on it and you and you go. So I want to share with you today in this episode, these two kind of before and after things that you can begin to work on. If you have more time, that's probably going to be my best suggestions. But wherever you are, give yourself a break. It's an awesome time. You're not making any mistakes. There's still time to figure these things out. So let's kind of give ourselves this grace. It's an amazing thing, creating life, giving birth, and whatever, all of the things that it brings is amazing. So here's what I want to focus on with you. In this episode, I want to talk about

things that you kind of have to make decisions ahead of time, but the first one for me is figuring out how much time I can afford to take off, right and depending where you are with your career, if you have a business like me, if a team who can support you, that's awesome. If you're a solopreneur, we have a small, smaller team. So putting some of these things in place ahead of time, maybe you need to let your clients know that this is happening and so forth. So obviously there's going to be a downtime regardless where you stand. Maybe you have a formal maternity leave plan and you work for an employer and they give you specific time off. Just have that idea in place and be flexible, because things can adjust. You may expect that you are ready to go to work earlier than you actually thought, or maybe not second layer to that, because unfortunately, as much excitement and love and peace and joy that this, this phase of life brings, we got to pay our bills. Okay, so don't want to burst your bubble, but how is the whole spending thing is going to work out for you? Whether you've been already making a list of all the baby items you. Going to buy, and I have a story or two for you to share. I feel like I've done a better job this time around, although we are having a girl. So you can't convince me that I don't need to buy all the little cute things and outfits and the bows and the blankets and the stuff, although I know in my heart that the baby doesn't really need all of those things, all the babies needs is your attention, your warmth, time spent together, your love. But I will not be judgmental if you do it in a way that feels right for you, but sit down and map it out. And the reason I mentioned is that free for you to figure out how much time you take in ahead of time, because you can kind of bake that in into what would the next couple of months of normal family expenses would look like? Yes, you're going to incur costs. Yes, there's going to be out of pocket expenses, but I just don't want you to be cut into this phase of like, okay, how do we do this? So if you have time, let's map it out. Some of the basic stuff. Make sure you're covering your living costs. Make sure you all of that stays in place. Your bills are paid, but what additional layers and expenses might come up? And my my next kind of before the baby comes, item was to figure out the medical insurance. How are you going to add the baby to your current health plan? Are you going to be changing the health plan where the delivery will take place? Are they taking your health insurance? So like some of this logistical health plan delivery options is is good to figure out that way you kind of go into this and maybe come early, baby. Do tend to come early at times, then, then you actually have all of this mapped out. A lot of it also could be adjusted to take care of after the delivery, there's a grace period after the baby is born to figure out maybe there's a better plan for the whole family, because you could make an adjustment. And having a child is considered to be a major life event, and that opens up some doors to make changes as well. So those were kind of like top of mind for us as we were preparing, and still are preparing for this baby to arrive. Once you have the baby, soak in all the time that you can just be present, enjoy, don't worry about the world. Life is going to be just fine when you come out, out of this initial phase, and I tell you, it goes by so fast and just blink and the baby is like walking, but let's just hope that at least you put putting your head up before that all happens. Once we have some time energy, we're getting some sleep, we can start talking about longer term planning items. And I'm going to have more episodes on this for you, because I love these initial planning steps for my clients, and I also have done them myself once before, so I have kind of like checklists and protocols for you to follow, but the topics I want to initially kind of scratch the surface with, and if you happen to be in a phase where maybe there's an open enrollment season where you can kind of tap into and see how much life insurance do you have, do you add more? Is there disability plan? And maybe there is a flexible spending account for dependent care, right? Because you also need to think about what kind of child care plan you're going to have. Is the baby going to daycare? When is he or she? Are going to daycare? Are you going to have a nanny? And so forth? I mean, the list is pretty long, and that's why it is so beautiful, that you get some time to think all of these things through. So once the baby's here, we're going to dive into things like life insurance, health insurance, right, solidify, and all of that too. And what kind of expenses is the baby going to have? I mean, diapers, you know, hopefully breastfeeding doesn't cost as much. Maybe you're spending money on formula and all the cute clothes and the other things that come with it, and then legal stuff, this is kind of like what makes every parent sleep better at night. It actually made me do that, but making sure we have our estate planning documents in place if something were to happen to my husband and I, I have legal paperwork signed by attorney, created by attorney that states, here's what and how my family is going to be taken care of. If you have older children, they're the ones that also need to be thought about, and so forth also. And this is new for me, this this time around, and is how do you. Navigate this whole dynamic with having an older child who is kind of right in the middle of all of this, and how do you start to like, schedule and plan your day of having to be present? And that's really my goal. Is like, How can I be a mom where I'm present with both of them, where I give myself to both of them, because when you had one, you had your first one, that was it, right? You were all in it. So I am open for ideas, suggestions, how to do that, where, and how to plan my days and so forth. And then finally, I can't not talk about this, but a good financial planner brain goes to think about as soon as you can get your hands on the birth certificates and get a social security number, we're talking about saving for future education, whether it's K through 12, school, daycare and then college. And so we're going to have more conversations about that, but make a list, and I'm excited, because one thing that I want to do this time is to give my permission to just be just go through it one day, one day at a time, enjoy the moment, and as the time unfolds, I will get to those things. What I do want to emphasize for you this time around, if you've done it somehow differently, and if you didn't get to do some of these things in whatever timeline you have for you, it's okay. Don't beat yourself up. We're going to work on this together. The most important part is to have fun, enjoy and really soak in every minute of this precious time. So I am heading into uncharted territory with adjusting to have a two kids, a mom of two kids. I really do know what it takes and what it's like to have a boy, but girls, yeah, all kinds of advice is coming at me, and this was the most overwhelming part with Liam and I, after a while, I kind of put the this sort of mechanism to tune out. I listened right? I had a filter that helped me kind of all right, some of these things set well with me, and advice that other mom moms shared and your, you know, own parents and uncles and well, aunts, probably more. But I found a way where I was like, what really works well in my family, what sits well in my heart, and really, there's not a wrong, right way to raise a child, especially in this new newborn years. So I am excited to continue sharing this journey with with you, coming up with resources, ideas. I think this time around, it's going to be so much better, because I've done it before I know where we are, I will be excited to just be in this moment, in this phase with you. Now, also for us personally, it is happening around holidays, and so I plan to kind of go into it with not only enjoying the newborn time and adjustment as a family of four now, but also seeing like, how do the holidays work, and what do we do, and all of that good stuff. So for now, let's dive into these evergreen topics. They did not go out of style, I promise. And don't forget, there's just not a better time than today to start building that solid foundation for the family that you're raising, because they really, really deserve it. Thanks so much for going on this journey with me. Thanks so much for being there. I am happy to hear all of your comments, even though I want to take some time off to experience this amazing thing that life gives us, I'm still all ears and can't wait to reconnect with you. Thanks. So much money, boss, parents, that is the whole reason I actually keep on doing this podcast as time goes on, week in and week out, trying to think like, how do we really become those bosses, whether it's money bosses, parent bosses, but just how do we become better examples for this Next Generation? Because that is, to me, the most rewarding thing in life. Thanks so much for tuning in. If you haven't done this yet, I would love the best gift you can give me this time around is Go Go on Apple podcast website, find my show, money, boss, parents and leave me a. You, whether it's just congratulating me on the new baby, or just any thoughts you have, it makes a world of difference. It lets other people find this show, and it gives me continued excitement and belief that you want to hear from me, and so I am

thrilled and grateful to continue this journey with you. Thanks so much for being here and giving me your undivided attention. Today, I want to talk about first financial steps you can take when you expand in your family. I think you can never prepare enough for this amazing life event, emotionally, physically, mentally. But there are these steps you can take to prepare financially. And I remember when Yuri and I were expecting our son, Liam, who is turning two and a half years old in the next couple of weeks, I could, I could, you know, talk to people and hear all of their suggestions and advice and recommendations. But it is any new parent. There's just so many overwhelming things that are happening, especially as you getting ready for this awesome, awesome, awesome life change. But I tell you one thing that times goes fast, so bad and good in a way. So think about this as we go through the through the discussion today, and I share with you a laundry list of things that you can consider. I know that you may not get all of this done by the time baby arrives, I really do, and you're probably going to take your time, even more time to get the stuff done after but at least get on it. Okay. So I know that we can spend probably next years, right, couple years, talking about all of these topics separately. So I want to just highlight a couple of things for you that you can start working on. Okay, so please do not feel overwhelmed. Just take this as a suggestion that you can get in front of yourself. Share this with your significant other, and I think the the two of you can start working on it. Okay, so I want to break it down into two sections before the child arrives, and then after. So I think the one of the first things to really think about, and I wish I put more thought into it, when before Liam was born, is how much time you're really going to take off. I know there's the standard, there's the maternity or paternity or family leave structures that exist if you work for company some states, for example, California has a family leave plan. It's not very much time, right? And as I said earlier, it goes by so fast, especially, although I don't know this the saying about the days are longer, no, the nights are longer, the years are short, or something like that. I know I'm butchering it. Was very true, especially when you're not getting much sleep. But what I'm what I'm getting at you here, is think about it right? And I know you can't make a final decision right beforehand, because things change, right? And I one, one sort of regret I have is that I wish I would have had more time, and I had all the control in the world as I'm my own boss that can, you know, can take as much time off, but I had a I wish I would have been prepared a little bit more for it mentally in terms of, like, Okay, I'm gonna dedicate this time. This is what I'm doing. And so I have taken plenty of times almost six months off, but that's what I want you to think now. It's not just, oh, okay, I'm gonna take time off. I want you to think about All right, so how does this really, really gonna impact your budget. So it's my task for you. Number two, how are you going to be managing your living expenses? Right? Because if you stagger in your time with your significant other, if you're, you know, taking a pay cut if you're not getting paid, right? Because most, most commonly, you know, the first six weeks are definitely 68. Weeks are definitely paid in one way or the other, right? In terms of short term disability, maternity leave and things like that, what is going to happen after that? So because, just because the baby's here, life keeps going on, right? You still have to continue meet your financial obligations. Your bills are going to have to be paid. And guess what? Something really amazing also happens. You now have this little teeny human that you want to spend all your money on. At least I did and still do. And all the baby things are really, really huge. So I promise you, once.

Be enough money to pay for child care expenses, daycare expenses. And I know these are a lot of like things to consider, where will my child live? It's not for your spouse so much. It is, though, for your spouse to use right or significant other in case of your finances, but it is really to provide for your child right and your family, of course, but so think about those things. Do they have a roof over their head? What school are they going to go to? What daycare, right? Or is it going to be a private school? Do you live in a good area where all of these things are aligned? So there's different ways to calculate it. Again, I'll link an episode where you can dive into more details, but it is one of those things that and also, the sooner you do it, the younger you are, the less it costs you. Again, I've seen this so many times where, you know, because we get as we get older, we develop certain conditions and things happen, and our bodies degenerate, and all of this. So get it early on. And another feature that I really love about life insurance is that you can start with getting coverage, right, some coverage your employers offer protection. So that's another thing around having a baby, right again, constitutes a qualifying life event. So you could increase your coverage. You can stagger these policies. You can get little bit now and then you can add more later. So don't get too discouraged, and particularly for women, once you're past your first trimester, you're not going to be able to get any coverage until you deliver in six weeks later, at least, right? So at least you know for your male counterparts, your partners, who are not carrying and delivering a baby, that's something they can be working on. It this time. Okay, all right, so those are the four things that I want you to kind of work on as you're expecting for your bundle of joy to arrive after this happens, it's going to be awesome, I promise you overwhelming, challenging. So take your time, right? It's really like one day at a time. I'm going to circle back to making sure you really set up the coverage for your child right, and you've added them in the first 30 days. And that's the hard lesson I learned. I've called, I tripled called, and I double called and everything, and they still didn't add Liam to my coverage. And so, as you may know, right, if this is not your first child, but if it is going to be a first child, normally, in the first year of their life, as you probably see now, you know, during pregnancy, there's a lot of visits to the doctors, right, checkups, right? Especially for a newborn you have, like, first month is like three or four times, and this is if nothing happens, right there, there's no complications and things like that. So because it is part of the the standard right preventive care, you'd really want to make sure that they pay for these visits. And so I the hard lesson learned here, and I still, until this day, really don't know what, really what happened and why. There was such a conundrum with this coverage, but it was really hard to then untangle, because what they started to do is they start me to they started to send us the, you know, the bills and invoices for all the visits and so then I had to, not, I mean, adding the child to the coverage is not that hard, right? It's just updating the records on their part. It is then settling all of these invoices and having to make phone calls. You don't want to do that. This is the worst you know thing to do in the times such as having a newborn. So again, make sure you have proper insurance coverage. And if you've decided that you wanted to have a family plan, that you've done it like you've done in the first 30 days, because after that, you're gonna have to wait until there's an open enrollment season. So like for us, Liam was born in January, like January 3, so I, you know all of this is happening, and I find out, like, it probably in the middle of February or towards the end of February, like, what our coverage is not proper. So then, right? Because the open enrollment season is usually October, November, so yeah, because that's, that's that could be stressful. So trying to help you prevent some of these things that you could be stressing about. All right, child care. I know a lot of this things are thrown at you, but I'm talking about this from from financial side of things. So what is it going to cost you? Right? What options are there? Like, really start considering and looking at things. Do you want a big daycare center. Do you want more intimate in house daycare centers? This is beyond what you're going to, you know, the time you're going to take off to spend with your child. And also, like, I feel like we got so lucky, like, I literally look like just at a couple of places in our area, and got on the way. List for all of them, like, like, significantly easy, right? It's just called applied, and they put us on a waiting list, long waiting list. And I think that, because Liam didn't start until he was six months old, it really still added more time. But I don't know, I didn't have that one of those horror stories that you just can't get a spot in the daycare that you want. So I feel, I feel pretty good about that, but I think it may may have been just the luck. Okay, two more things estate planning documents are those. Those are the documents that really probably go well hand in hand with making sure you have proper life insurance coverage. Estate planning documents are really just your wishes, in writing about what to do with, with assets that you have, what to do, you know, with, with all the possessions after you are passed away, and also, right, like, though, that's the things that are discussed and outlined in your will, right? And again. Now your sort of situation changed because you have a minor, right? Your child constitutes a minor until they turn 18, so they can't inherit your assets. They can't make financial decisions. Not a baby, right? And not until they're 18. So whatever you have is not going to go to them a state, usually right in which you live, decides what happens if you don't have these specifications. And that's what these documents really help you. It is not hard to do. It's actually by far the easier thing to do than create a complete money roadmap, right or financial plan. So make sure you create those when you start right, or update if you haven't looked at them in a while, especially right, because you have, again, a life qualifying event. And my last thing on the list is opening a, or think about a college savings strategy, right? Is it? Is it opening a 529 plan? 529 plan is a is a college savings plan. So because, again, trying to get you to do these things earlier, because it's going to help you, start to invest sooner, start to save sooner, and give you a lot more time to get there. So here's my laundry list of things for you to consider. Think about start asking questions. I'm going to spend a lot more time diving into each of these, because there's layers and layers and layers and layers of questions. But you know, first and foremost, I'm really excited for for this opportunity for you to do things right. And I felt like that was the time of our life, when, when we were in this phase, and I, you know, I was one, I'm still one of those moms. I think, you know, people laugh at me for this, but, you know, the first year of child's life you celebrate, like, every month, like, Oh my gosh. First you like, counting weeks or days, we then weeks, then months. You like, all right? You two months, three months, four months. So I, I still am counting months, right? It's just, it's just been such an exciting journey of his life for me and so but I think you can give yourself a lot more freedom, right, and less stress around finances, if you think about these and implement ahead of time. All right, many bosses, thanks so much for tuning in. Please go to iTunes, hit subscribe, give us a review, and I'd love to hear from you until next time, remember you are the bosses of your own money. You.