Kovar Capital: Preparing for the costs of having a baby

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Hi Taylor: My husband and I are expecting a baby in May and while we’re both very excited, I’m starting to get a little freaked out about all the costs, namely the hospital stay and whatever other practical expenses pop up unexpectedly during the process. Got any calming advice? - Hesley

Hey Hesley: Congratulations! I’m happy you and your husband get to welcome a little bundle of joy into the world. It’s unfortunate that we often have to worry about money during such an exciting time, but that’s how these things go. The good news is you’re planning ahead and that will help you prepare for some of the bills and potentially avoid a few unnecessary payments.

Having been through this process myself, one of the important steps I learned was to call both your insurance provider and your care provider before doing lab work and ultrasounds. Even with great coverage, you may still have to jump through the seemingly needless hoop of getting authorization from physicians. For example, your provider may cover lab tests and blood work, but certain tests will only be covered if your doctor submits a request for authorization. Even if your insurance company has stated that they cover these tests, you still need approval.

This is a recurring theme for some pregnancies, so it’s possible you can save yourself a lot of money just by asking questions. Bringing these matters up may also help you uncover additional means of financial assistance. Depending on your income, the state might cover a portion of the hospital stay, so that’s definitely worth looking into.

For the practical expenses, just keep thinking about things practically. Some people pour thousands of dollars into decorating a nursery. If money is a concern, don’t go over the top in your baby preparations. You also shouldn’t hesitate to ask for hand-me-downs and help from other young parents that you know. People with children are usually very willing to help out the newcomers, and that kindness is something you’ll want to take advantage of.

While you do your best to avoid huge expenses, make sure you’re putting as much money as possible away for baby needs. As you said, a lot of these costs pop up out of nowhere, so you’ll want money that’s ready to go when something comes up. Without starving yourself, see how much money you can budget for when the baby arrives.

Keep asking for guidance! Different people will advise you differently, so keep gathering info as you find your way. As long as you’re making good choices, I trust everything will fall into place. Congrats again and good luck!

Disclosure: Information presented is for educational purposes only and is not an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. To submit a question to be answered in this column, please send it via email to Question@GoFarWithKovar.com, or via USPS to Taylor Kovar, 415 S 1st St, Suite 300, Lufkin, TX 75901.

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