How to Financially Prepare for Having a Baby
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okay. Next up we have a question from Lewis. He says my wife and I are expecting a baby in march of next more so exciting.

congrats. SHE makes a significant part of our income and will be on maternity leave for about three months. What is the best way for us to prepare financially? And uh, we do have a new resource about this first. So I want you want to speak to IT, but as they do that or after they answer head of money guide com, slash resources and make sure you grab our new child checklist resource because IT has some categories is are free to think through, like cash flow, insurance, taxes, long term planning things maybe you should think about and have a conversation about as a couple as you're thinking about having new baby. So with that said.

what do you guys have to say to the east? Is this something we should let me be even gives some I mean, some expert in how maybe .

you should start this one off as you think about maybe being a few months .

away from right now that they're trying to get me to tell having A B Y, which is probably i'm going appear fairly.

I think SHE said that.

which I don't I don't care. I just haven't anything about IT yet. But yes, no, I am.

I have a baby already. He's a too, and then I have one on the way very soon. So i'm thinking about this a lot.

And a lot of the stuff that is on our checklist is great because it's just like any new budget items that are going to come in, any new line items of that's a big deal. And you're tracking budgeting, making sure your emergency fund d is up to date and has enough in IT. A big one for me that the first time around was just thinking about insurance like, oh, i'm adding another person to my insurance. What is that going to cost me per month? So like that's going to be coming out of my paycheck and how many days do I have, which usually thirty to sixty days you have to add that baby to the so be sure that you kind of ask your employer all about that um things like that and then, uh, you guys got on me about wills and life and sure wow.

And that took me a little bit longer .

than IT should have. But I think that's a very reliable things. I'm happy to share that even me who's hanging out with them every day, every time we would have IT come up on a show, one of them will go, do you have life?

Maybe like, i've looked into IT. Like, I i've been talking to somebody. And then finally I was like, yes, I have IT now. So definitely do that.

And this is just a reminder to do that.

This is the big thing that out, you know, obviously having hopefully, you've been followed the thing up, hopefully you ve been following the finance to order Operations. And i'm hoping that you've got in at least a step. You have a fully funded emergency reserve. Means to us is that you would have somewhere between three to six months of living expenses in liquid cash available.

But you said your wife earns a large chunk of the household income that you guys bring in, she's going to be eternally I didn't say if I was paid leave or non paid leave, but I would imagine probably what you don't necessarily want to do is going to maternal to leave and let's assume that was unpaid for a moment and just pull all that money out of emerge reserve because you don't want completely dead that why you're on this, although that is that an example of what I would be there force. So I think one of the big planning opportunities go into is obviously think through the things you know they going to have, have to buy that to buy why the stuff, all these different additional budgetary line ideals. But one of the things that my wife, an idea when we were expecting our first child, as we just know, the things we didn't know, there are a lot of like unknown unknowns.

And so so if you can beef ing up your emergency fn just a little bit to give yourself a little of flexibility, but IT time is not a horrible thing. So if you are lean on your emergency cash, I would think through between now and march, potentially bolstering that a little bit in worst case scenario. Yeah, baby gets here.

Expenses are not as high as you thought they were. Well, then you can just redeploy those excess funds in your roth ira and attack were broken account. But I think having that margin there when life throws all the newness of baby at you, will hopefully let the money be kind of one less thing you have to think .

about in this moment. Part of the nesting face where you in addition, like painting the baby's room and simply all the furniture that in three years, it'll tell you now could potentially it's one of things where I want you to go head and start thinking about, just like you do spring cleaning, maybe this is the time to you clean out the cause.

It's look around your house, see if these things you could sell to make money off of as well as go head and everything that you're doing financial because you look without a out out, you're going to be spending a little bit more money. Um so why not check all your subscriptions, check to make sure there's not money that in the past you just didn't put a lot of thought towards and it's just leaking out in ways it's just not necessary. Make sure you analyze, you know what do we do and what's the plan for cars in case one of used driving around the two ceder and you .

you need that was what you had to tell me about a yes.

yeah that be thing like all and not also.

I mean, don't feel, don't fall in the trap of this is if this is your first child, don't follow the trap that you have to buy the best of everything. I mean, that's the thing that I always, always amazed .

by is and .

this a whole industry trying to the most expert I want you to get the safest I mean, make sure you protect your child would like on the car seats and all that stuff. But IT doesn't have to be the one that that the instagram people are pushing and all the fancy folks are. So these things I do think about when we had our our second child, I didn't math.

I mean, the strolling er was, instead of this big fancy thing, had to breakdown like an organ engineering marvel of the world. We just had this like really like a seventeen. I could have a urea A A IT is interesting how you change um between children so don't fall for the prey. It's just like and I know people hate IT when I say it's like the the the baby wipe warmer and all that stuff that's that's that's so perfect you know times it's it's sold to you. Um I don't know, i'll use all those fancy warmers and things .

like the never did the baby.

Some of the things are fine and nice, but some of them .

are really not needed ever other kids take .

care that now that .

was a good answer hopefull.

That helps you out lose. This is where I did have one other thing. It's just so personal because personal finance is personal.

But just make sure you know how your insurance is working. Like step one, is deductible cover have you covered? Step one? Now is the time to really know that. And this is both for mom and baby like deductables to just think about that. You know, think so that maybe the other thing that wasn't a surprise, but I had to go due a little little bit of research and like work the first time.

And I love how you mentioned like the benefits because if you are on health insurance, I mean, all times we tell people when you do in family planning, it's okay to beef up your insurance. Now things are going back to Normal. Go go look at your options again to make sure that your help insurance does reflect to your choices.

Because sometimes those catholic planes that cover all the pregNancy, they're kind of expensive on a ongoing basis. You might want to drop back down to a more affordable plan. So just be proactive, look at your health insurance and don't just do what you did last year. You're actually think ahead.

Absolutely, will Lewis. Thank you for your question. Thanks, everybody, for the congratulations. That was so nice. But Lewis, if you would like a money guy, tumbler, just email winner at money that calm and we would love to send you on just as a thank you for asking your question and for being here today.

And I review I didn't mean like no of god you did that.

I was actually thinking about that the other day, like I am going to like disappear from the live stream. Like I guess people will noted. I.

Say as babies.

which is super great.

All right. Um OK jeremies question is up next ready for IT?

yes. Now .

speaking of insurance, he says open enrollment for health insurance is active for him right now. We currently have my spouses premium plan through her work, but we are considering going to a high deductable health plan so we can get in H. R.

C. How do you choose? How do you make this choice? You canna start to touch on IT. We are talking about kids just now. But can you speak a little bit more to that to help out, Jerry ma and anybody else is going to do open.

And roman, you are so much Better details. I'll give the broad and then you kind of clean IT up is that first you need the germ a, you need to write down what who your doctors are um if you have any prescriptions, if you have any upcoming medical needs, whether you do in family growth plans or if you just like at turn a certain age that required additional medical test and things like so just write all these things down.

So you kind of have all the factors that are going to play into IT. And then you also need to kind of find out how much subsidy is your employer giving you because there we've seen in lawyers that give you what I would perceive as catala insurance for practically free because they're just absorbing all the costs. And then these other plans where the employer r portion is just much smaller. And then you need to kind of comparing contrast with the premiums are for the different plans.

When IT comes to health care, none of us know exactly what's gona happen next year. We can. We can we can't plan for those like E R visits or those urgent care visits.

But I think what we found is that for most families, it's fairly consistent through time. You don't know what it's going to be, but you can have an idea if you have an idea of your health care spending throughout the year. Open a roma should be kind of a fun time.

And this is the way that I approach in this, a way I tell a client's approach you over a sprecher, and you have two different columns. And there are really four things that you want to look at to determine which plan should I choose. And IT really comes out of mathematics.

Think number one is a premium. How much does this catalan plan cost me? And how much does the hydro table plan cost me? Okay, there's number.

Number two, based on my medical usage, how often do I go to the doctor? What kind of doctors do I go see? What kind of medication, other stuff said, you have to project that. okay.

If I do these things next year, how much will I have to spend if among the cat light plan? How much? How to spend if I want? The high developable plan will obviously in very high health spending years, like in years that you have a baby or have a major surgeon, whatever the cat light coverage may make the most sense. But if you're a Young family or a healthy family or not a big health care user, odds are your cost for health are are going to be pretty low. So that's not to it's not going to be substantial on that plan.

Third thing, employer and seniors, does your employer put money into a health reimbursement account or help save account for you? And the last tax savings, if I do the hsc and I get a tax deduction, how much you cruise on my leger? Will you take those four roles and just add them up? And mathematically, you figure out, oh, I do the cat like plane and I have a baby this year, want to come out way ahead or man, if I don't use the turn to melt health care, I don't have anything else as Normal procedural stuff.

And I max out the H. I, C, and I get the taxi, i'm going to come out a lot Better. I would literally line up those four rows, do the math, and I would repeat that process every single year and open a romance.

That's why that I do IT a magical experience watching how your brain works. So I was like, you know, you see that that mean where you see the numbers just moving all around. I me was.

I was .

pretty ab, the hume.

That's amazing.

I'm glad I started. Didn't imagine try to .

follow that for great gema. Good question. Thanks for being here. We'd love to send you a money guy tumbler just as a thank you for asking your question for being here on the last room today. Just email winner at money guy out .

calm to cason that know I just realized because you mentioned that was from that movie, right ah but think you a brightling Cooper was also limit in which was kind of know you could be his brain was working in away that was on a whole different level. He was also .

in that movie also was a rocket .

or t he's rocket rock. Yeah, rocket .

galaxy.

I don't know if that really connects like the other to do, but shows that you got a little nerd announce of a nerd in you. And I think that's what you .

are trying to knew to say. I have things .

I was trying to.

but okay, know how my nerd .

cannot get revoked, but I didn't know what the actual name was.

Well, you work in hard with that stash.

Are you saying it's scarcity?

No, no. It's like a guy trying to I told you guys like you see models out about and they like on purpose are trying to do things so like you know to not show that their model let's both do and he knows he's all american B V. And he's like a put to my stash and you'll take away few points in I don't know, make me more like .

the folks like IT interesting theory like IT all right, I don't understand .

the thing under the lip though. It's a weird. Probably more .

personal finance .

question on .

the bottom to that day day yeah today.

I think all the places that both couldn't grow facial hair on on the size of ticks and stuff is all replaced her. So unfairness with the disappoint tion allocation, look, i'm that comes from a guy who can go any beard. So .

remember.

about .

twelve was over decay ago.

And I had a lot of people, I ask me what was going under that month?

everything? You guys? Okay.

that's not a good thing.

How are you? How are you really?

wow.

Meanwhile, grevious husband, can I grow beard in two days?

Oh, I. yeah.

I think it's one of the things you just like, oh, oh my god, special.

What a man alright um address questions up next to transition back into personal finance. He says unfortunately, which i'm so sorry as i'm unemployed and i've been searching for eight plus months, how do you know when it's time to consider moving your family to a different area?

Man, and that's that's so hard because I mean, yeah if if you if you are the the the the provider for the family and the family pending upon you, you working at some point, you have to figure you have to figure something. You have to figure out some way to solve that problem. And I said this earlier in the show, difficult financial positions require difficult financial decisions.

And so IT sounds like you're kind of faced with one of two you've been looking for work. I don't know how specialized your particular location is, and I don't know like how the I don't know how unique your skills set is in terms of being able to find a position may be that's why it's been eight months. So you ve got to figure out one of two things.

Do I put myself in a different geography where i'm able to get a different job and I move, or when I hear something like i've been out of work for, like H A year I was, do I even begin thinking about a different vocation? Do I begin thinking about, is there if I need to have some type of jobs? Is there are some sort of tangible industry that I can move into?

If staying where I am is something super important because i've got family ties or communities or whatever the thing may be, I think you have to answer one of those two questions because eight months has been long enough now or even if you had a fully funded emerging reserve and even if you cut down your footprint, it's getting the place now where again, you ve got to make some really, really difficult financial decisions. And we've seen this before. We've worked people before who that decision has been relocating, moving to a different part of the country or different part of the state in order to be able to find work so that you can provide for the family.

But that's tough. Um I have a few experience shares on this is that right now, if you are in the I T. Filled, it's pretty brutal out there.

I've got clients that that resemble some of the things that I am shared about himself. I have friends, my thought I just had a catch up call just a few days ago, one of my friends in the R T. Field and he had been out of um work since April.

And so you think about that almost you know five, six months here. Here's the thing about them is that I would encourage you ve got to trios your financial situation because you have had a lot of time here. Um I want to make sure you have checked all the boxes first before you make even bigger decisions.

Is that have you looked for any all the remote option? So it's just like my body that I talked to a few days ago, he hinted up finding an international company um in the space that he was in that is trying to set up some stuff here in the states and because he had the right experience that the kind of cross section and he knew some people, he was able to network and get an opportunity that's going to be completely remote. So wasn't going to have to move for anything like that.

So check to make sure that you you're opening up all avenues of employment with your speciality or or abilities. And then the second thing is, I think bodi hit IT. You ve got a if that doesn't if you can check the box and it's in, you're now at the point you've got people counting on.

You look at the geography. And then the third thing I now let's talk about career choices. You maybe you need to pip IT and and figure out because the the problem with certain sectors is that they don't have those v shape recoveries that they can drag down for a period of time.

And you need to look at your financial life and see, can you whether this or is this something, you need to go here and make decisions now so you don't get to the end of your emergency reserves because that's when you start making those desperate decisions that no one wants to make. So make sure giving yourself enough slack in the system and go here and make those hard decisions. And here's the thing, always share with people.

We talk about hedonic life decisions. You know, this is something that's very important for people to understand. We always say, when you have good things going on in your life, you want to spread out those good, those purchase decisions and those those life decisions that you actually enjoy and saver.

The good things are happening. That's why when lottery winners by new car, new house and do all these things, all I want, you don't get the experience. But there is a converse to this. When you have bad life, things happen to you, something about the human nature that you should make as many of those hard decisions all at once, so you can get back to your baseline happiness level as fast as possible so measure twice, cut once um and don't drag out the hard decisions make, make the move, make the choices and so that you can get back to your baseline happiness and hopefully on your step and journey towards success.

Love IT adam, thank you for being here. Thank you for asking a question. We love to send you a money guy tumbler since we answered your question on the show here alive, just email winner at money guy down calm to cash on that do that by the way.

one thing, this is something my body when I was talking to me. So hey, I need to do some homework. Money, get homework for me.

If you could remind me, post, show this. But this might be a help if you'll find IT really quick for adam. And we did an episode when life doesn't always go the way you thought.

And remember, we talk about how food. A lot of people think it's a stair step. You from step four to step five, step six. But is a lot times that life will take you in where we have to take a step back, three steps, get recognition and move on. I don't know if that that if if the content team, if you can remember, because I was trying to I remember filming IT, but I could remember which episode we created that for. But that's something .

that make that fits into what adam for a messy middle kind of through things .

like this. And it's important that you realize that what's in the pressure of what you think life is to be, life is always going to have some hardships coming your way. And the flu is there to help you. It's not just a stair step that actually can go backwards and help you recover, berate and move forward.

awesome. okay. We have a question from evan for you guys is coming up next. He says, how does a couple learn to compromise when IT comes to finances? My wife is more anxious.

And once our emergency fun to be over six months, but i'm fine with only four to five months, what do you think when having these conversations? How should he approach this? How have you seen other people successfully navigate things like this event?

Sounds like you need to have a six month emergency.

I think we're talking .

about give you an answer. But when you talking about you're four months, she's six months.

SHE is more than six months.

Four months mean the way in my household. I do. And I think I read a post about marriages and i'll come to you from the cinema guy who get closer to thirty years, is that marriage is not a fifty fifty split that, like everybody says, that really does need to be one hundred zero.

And you're hope with, if you did IT right, your spouse is looking at as one hundred zero two and you guys try to do everything you can for the other one to make them happy. Um and I think that that's why if there's something small um it's just like on tiktok, I came there was tiktok instagram. But there are some trend going around where the wife asked the husband, when you make me some tea in, the husband goes, is this one of those?

If I do this for you, you can do something for me. And you know, everybody was like, hate them on the husband. And there is something to that is that you guys, you always see how self less are you being in the relationship and all especially in the little things, because you're going to have a lot of egg breaking over bigger things. See you to figure out, is this one of those moments where if you know that gives you your spouse significant piece of mind to just save two more months before you build, I would lean into that that pieces and yeah .

I think the biggest way that you compromise inside a relationship is through communication. You have to communicate uh, the why behind the decisions that you're making. So one of the questions I ask is, are, so be hard.

Do you want to have more than six months? okay. Well, i'm ervy about this. I'm nervous about that.

You have to realize, ally, recognize that if he is nervous and having a idea around something financial that's not, that's not made up, that's a real way that he feels because then you could ask you the same thing, hey, why do you only want to have five? Well, I understand the opportunity cost of money on my dollars to be working. okay.

Well, both of those are truthful. Both of those are factual things that exist in each one of your unique financial. What you want to figure out is, okay.

Is there a way that we can compromise? Is there a way we can meet the middle and maybe meeting in the middle? You mean, okay, we're not going to be 4， we're not going to be will do six months or I might say, hey, how about this?

Are you comfortable if we have, uh, seven or eight months of merc fund? Are you OK if when we look at our total investment porfolio, maybe we have a slightly more aggressive portfolio, maybe we have a higher savings rate so that we can be putting more money to work. Can you figure out what are the goals were trying to work towards that? We both want to be financial independent.

We both don't want to work anymore. We both want to be able to take the trip. We both want to be able to whatever that thing is. And okay, these are the goals that we both have. We both want to be able to accomplish these things.

What are the best ways for us to be able to accomplish those? And while your answer might be OK lee cash and vest at all, her answer might be not lose sleep at night, healthy eyes, cy fund. And then very aggressively, I think if you can get on the same page about the goals behind the decision you're making, it'll make IT much easier for you both two again, he word compromise and fine OK.

Where can each of you so that you design a plan in a portfolio and a strategy, the structure but not it's not just all good for you or all good for her. It's all good for you, you guys, for all, for you, for you, for you. IT came .

ern act, you guys.

yeah. You know, I was great. I am. Thank you for the question. Um we d love to send you a money guy time where just as a thank you for asking the question of for being here with us during the live stream today, just email winner at money guy down calm if you would like to cash in on that event you know what one .

of the things that chest the most concerned about, what they are really nervous that when reads goes out on matters just off, they are like, what on earth is gonna have with these two guys? I think we .

got some other people here who can at least, you know, curb the enthusiasm.

Nice, nice choice words.

I think that's a titled or something. Now I say that anyway, yes, somebody said they can't be stopped and I said it's, they can't be stopped, but they could be curved.

Aw, well, great.

These were really good questions, guys. We love answering them. We are so grateful that you continue to show up and just want to talk about personal finance and hopefully help you do money Better.

And like we've said a few times, they just sleep a little bit and I feel a little bit more confident. Just help you on that journey. That's what this is all about.

Um even when the cameras turn off today, money guy dot com is always there for you. I always like to remind you for that, just because we put a lot of care into IT and continue to do that to hopefully help you continue to answer these questions. Money guy, not calm.

Slash resources is a great place to start because there's all of our free calculators downloads that go even more in depth or are great reminders of what we talk about on the show every week. So thanks for being here. Check out money at 点 com。

Guys, we love helping you live your abundant life. But I think that is worth reminding everyone that abundance is when you're building wealth and you actually have the intersection of knowing what you're why and purposes. Guys on my host brian present, mr. Bohn son money guy team out. The money guy show is hosted .

by brian present. A bound wealth management is a registered investment and visor firm regulated by the securities and exchange commission in accordance and compliance with the securities laws and regulations abound, wealth management does not render or offer to render personalized investment or tax advice through the money I show. The information provided is for informational purposes only, and does not constitute financial tax, investment or legal advice.