Becoming a mom is an indescribable feeling. You’ve never been so happy to wipe someone’s butt or to pick out a booger in your life, but pretty soon you’re throwing back coffee like tequila shots. Everything is brand-spankin’ new, including the financial side of things.
Parenting is all about trial-and-error, which means if it’s your first rodeo you’re going to fall off the bull quite a few (or in my case, a lot of) times.
It isn’t possible to be fully prepared for what’s ahead, but you can minimize the financial impact by knowing what to look out for. Here are nine common money mistakes new moms make.
Not looking over insurance plans
I worked as a CSR for a popular insurance company for three years and the number of calls I received from confused moms was astounding.
Before that position, I assumed that I was the only person in the world who thought insurance was like a foreign language, but a study conducted by Policygenious found that out of 2,000 Americans, only 4% had a basic understanding of health insurance.
Don’t be that mom who waits until those bills come flying in (because they will) after delivery to start wondering how your insurance plan works. Request a benefit summary from your employer or insurance provider and get your highlighter ready!
What to look for in your health plan:
Your deductible. Your deductible is the dollar amount you must reach in expenses before your plan begins to start reimbursing. This means that if your deductible is $1000, then you have to hit $1000 in qualifying expenses before insurance starts helping you make payments.
Yes, that $1000 will be what you come out of pocket first.
Your maternity benefit. This will include your prenatal services, birthing centers, midwife services (if eligible), and labor and delivery.
Make sure that your plan doesn’t exclude maternity coverage and/or dependent coverage if you are carried under someone else’s plan.
Next, check to make sure basic maternity services, such as routine ultrasounds, are not excluded.
The reimbursement rate. This will be how much your plan reimburses after the deductible has been met. For example, if you are covered under a 70/30 plan then insurance will pay 70% of your services and you will be responsible for 30%.
Your out-of-pocket. This will be the maximum amount your insurance company will allow you to come out of pocket in expenses within a specific timeframe.
For example, say you are in a calendar year plan with a $3000 out-of-pocket. That means the maximum you will be out of in expenses that year is $3000. *This may be contingent upon the network status of providers.
Knowing your health care benefits will allow you to properly prepare for upcoming costs. If you know what to expect, then you’ll greatly reduce the chances of having a mini-breakdown after all of your claims have been processed.
Not preparing for maternity leave
Look, not many of us get the option of a paid maternity leave. If we do, the pay may not be the greatest.
You know you’ll be out of work for about 6-8 weeks, so that is 6-8 weeks that you need to financially prepare for.
With my first child, I had no clue that I wasn’t eligible for maternity leave and when the time came for me to ‘enjoy’ my days off I was in shambles. If only someone would have told me that my bills would not care about my leave.
If you’re employed, look over the maternity leave policy in your employee handbook. Many employers offer short-term disability after a certain amount of time (say goodbye to your PTO) which is a percentage of your monthly income.
Related reading: How I Saved $3,000 for Maternity Leave on One Low Income
Keeping the same spending habits
With a new little life comes new expenses. As you adjust to sleepless nights and the unrelenting cries of Where’s my bottle?!, your spending and budget must be adjusted as well.
You may be thinking Duh! , but recognizing unfavorable spending habits isn’t the easiest thing to do. If it were, many of us wouldn’t be in the financial mess that we’re in.
While you’re lounging around with pickles and ice cream or enjoying the silence of nap time, pull out your budget sheets and do some reorganizing. Determine where you can trim the fat to make room for your new roomie and remember to be realistic.
Not having a baby shower
With baby #2 I swore I wouldn’t have a baby shower until I took a look around his empty room. Free gifts and food? Why yes!
If you’re toying with the idea of NOT having a shower then you are seriously missing out on the chance to save big bucks. Think about it, someone else is buying the things that you need so that you don’t have to.
To make the most out of your shower, try adding only necessities to your baby registry. All the fashion forward outfits will be a given, but if you’re gifted baby’s must-haves then that’s more money you can put towards your other financial obligations.
Pulling the tags off of your baby gifts
I’m guilty as charged and I kicked myself for doing this!
After you’ve been showered with gifts, the excitement to clean and put everything away is unbearable. Then, you realize that cutesy top won’t be in season or you’ve got multiples that won’t be used.
Oh, how you wish you could trade in something you don’t need for something that you do!
Pump the brakes on ripping off the tags, especially on clothes, so you’ll have time to determine what you will use and what you won’t.
Not buying different sizes
There’s nothing like an abundance of items that are the same size. *sarcasm*
When you’re shopping for the baby or doing your registry, be sure to include clothes and diapers of all different sizes. There’s no way to estimate the growth of your baby, and you don’t want to get left with multiple boxes of diapers that are a size too small.
Hand-me-downs should be your best friend. Why? Kids grow like weeds and before you can even get in a good blink they’ll be needing a whole new wardrobe…again.
Who wants to be left with bags of clothes clogging up their closet that they paid full price for?! Definitely not me.
If you’re on social media then I’m sure you’ve seen pictures circulating of kids dressed to the nines. I often wonder how long after that photo was taken did those clothes stay as clean and crisp.
Probably not long.
When you’re a new mom it’s so tempting to play dress-up. I remember buying a ton of frilly, pink clothes for my daughter that she never wore. It was nice visualizing just how cute she would be wearing each outfit, but let’s be real here. Babies are going to blow out diapers and kids want to jump around like wild animals.
Buying a bunch of fancy clothes is just a waste of money unless you’re raising some kind of model. That outfit you paid a pretty penny for is in danger of getting ripped to shreds.
Putting yourself on the shelf
Shocking to read here right? When you’re busy taking care of your little ones it’s so easy to forget about yourself. We sit on the shelf like fine china, closing the glass door and collecting dust.
This money tip is not your typical ‘give-that-up-to-save-more-money’. Instead of spending a lot on yourself, there is such a thing as spending too little.
When you get into the habit of not doing for yourself you’re more prone to overspend. This is because you’re deprived, and that rush of swiping your debit card feels so good that you have to swipe it a few more times.
All this to say, treat yo’ self in moderation.
Once you become a new mom your life is thrown in limbo. You don’t know if you will get to bathe that day and yoga pants become your favorite clothing item. It’s hard, but it’s also the most rewarding job you will ever have.
Don’t let money problems overshadow the joys of motherhood. Like I always say, get ready and stay ready!