My wife And I are expecting a newborn in March. Other than a few general ideas for trying to figure out which one of our health plans has better coverage options and wanting to setup higher FSA limits for next year… Im completely new to this and have no idea on what im doing
Does anybody have any finance advice on things to do or avoid?
Also, the doc is trying to get us to prepay the copay fees for all visits and the delivery which is very strange but has me thinking… Is it possible to pay that with a cashback card and then get an FSA to reimburse me later?
Most FSA’s i’ve had have let me self-pay and file a claim for reimbursement.
I have a 3 month old. I added them to my plan with an HSA and upped my HSA contribution and got another $500 company contribution for switching from an individual to me + kid plan (my wife likes her plan and it isn’t worth the argument).
Check the Facebook virtual garage sales for things like swings that your kid may or may not like. We bought a $250 swing for $75 that my baby used for a week and then stopped liking it. We sold it for the same amount. Also have bought other things like safety gates and a like-new backpack for carrying the baby on hikes.
We bought last year’s model of our stroller online for about $200 less than the current year.
There’s a book called Baby Bargains that my wife swears by.
The copay thing sounds super sketchy. Maybe the doc doesn’t want you switching to someone else later in the term? I can’t speak for your policy, but on mine there was exactly 1 copay–the first visit where the Doctor determined we were in fact pregnant. After that it was preventative pregnancy screenings and standard pregnancy appts all covered with $0 copay. We also had a $0 bill for Labor&Delivery, so that may not be the case for all plans.
Your general question about a FSA reimbursement is correct, you can pay it and then get a check from most FSA’s, just double check with yours.
A real shady move is to consider if you wife is going to stop working after the baby is born go with her company for a FSA and max contribution it. Since she’ll probably leave around Feb you’ll pay 1/6th of the total and have access to it all until she quits. If not, don’t over-estimte costs and get stuck with a ton of FSA money at the end of the year. It is use it or lose it.
As for the things your kid will need–you’ll probably have a shower and get a ton of crap you will use one or two times. Avoid buying anything until you can make sure your kid actually likes it (Zon’s swing is a good exmaple).
People will tell you “Oh this was a lifesaver for us, you have to get one” only to find out your kid hates it, and throws up whenever they use it. Blaze your own trail. Hand-me-downs and garage sales are awesome. Ebay “Clothing lots” if you don’t have access to hand-me-downs and buy someone’s entire set of cloths for a couple hundred bucks.
You need far fewer clothes than you think you do because you’ll be washing things every 1-2 days anyway due to spit ups, etc. And then when they get a little older they’ll tell you that they don’t want to wear anything except their favorite few outfits.
Just a couple things from my first year of being a dad:
Reduce your cable package - you won’t have as much time to watch TV anyway.
Breastfeed if possible - formula is expensive. If you do have to use formula, join the rewards programs for the big name brands (Similac, Enfamil) and look out for coupons in the mail and printed at the register. Or convince your spouse that the no-name brands are good enough (I wasn’t successful at this one).
Join the Babies R Us rewards program and do a baby shower registry with them. They send a lot of coupons and mail and email and have periodic store credit back deals on necessities like diapers. Target does this as well.
Find your local “hoarders/marketplace” facebook group and join that. People sell a lot of old baby furniture and toys for cheap.
Shop at places that sell used baby clothes like Once Upon a Child. They have a lot of barely worn stuff there. That’s because kids grow in spurts so you never know when your kid will be in a size for 1 month or 6 months. We have several nice outfits our son wore only once.
That’s all I can think of at the moment. I’ll add more later if I remember something else.
Congratulations! It’s been 20+ years since my kids were babies, but I remember making sure that the infant clothing was going to be good for a while. A 3 month old won’t necessarily fit nicely into a 3 months outfit, etc… It doesn’t hurt at all to focus on a size bigger than you think you’ll need. It makes diaper changing easier, too, depending on the outfit style.
On formula, the convincing argument is that baby formula is one of the most regulated industries. We use the Costco Kirkland brand for about 60% less than the others. It is really just a rebranded Enfamil I think. Costco is also great for wipes and diapers. Agree though, if you need to use a brand, put your name on all the lists and you will get a ton of coupons and samples.
In the hospital, take everything you can get your hands on, and then ask them to replenish and take again. Our hospital encouraged it.
I read this as if you want to pre-pay some expenses this year and get a reimbursement for them from your next year’s FSA contribution. The answer to that is NO. FSA reimburses for expenses incurred in the same calendar year.
As far as things to avoid… this might be controversial, but if you’re having a boy, avoid circumcision. It’s a barbaric, unnecessary, and ineffective medical procedure. Penn & Teller had an episode about it on their old show (S03E01) 12 years ago. Even the wikipedia article on it is pretty good.
It may be possible to do this depending on how the doctor’s office handles the billing with the insurance company. I think we had to make one copay (like Stubtify) for the start of the pregnancy and then our doctor’s office asked us to make regular payments toward the deductible we would be required to pay for the delivery. We couldn’t get reimbursed for the copay or the deductible until my wife delivered and the insurance squared up the global fee for whole pregnancy and issued the EOB for it. Not sure if it is exactly the same as OP’s situation, but we were not able to claim the required payments or even the first copay until the baby was delivered since the FSA admin required the EOB as proof. The copay crossed FSA years for sure and they deductible payments did, but they were prepayments so that legit for the second year.
Like someone else said, take everything the hospital offers (free formula cans, diapers, lotions, etc.). My wife breastfeed but we still wound up using some of the formula to supplement once or twice for one of the kids. Anything we didn’t use and we either gave to friends or donated. Clothing swaps and hand me downs are great and kids grow like weeds so you will be constantly changing the wardrobe.
I would say avoid the temptation to have the “best”. Graco car seats are just as good as Britax and other more expensive ones for protecting your child and they are a fraction of the cost. Same for other items, like cribs, bassinets, swings, etc.
Get a good pediatrician before you have the child and get familiar with their nurse line. The nurse line can help you determine if you really need to take action or if you just need to try something else (especially helpful in the middle of the night or the weekends).
Spending is going to increase with the new baby, so accept it and manage the new outflows as best as possible. Enjoy your time with your little baby, they do grow when you look back on the time they were small.
In general, take all advice about being a new parent with a grain of salt. What works for some with not work for others.
You might want to switch to a Platinum Health Plan. You’ll pay more per month until the baby is born, but then the delivery will be very cheap. After the baby is born, you can switch to a plan that is less expensive per month. Having a baby is a Qualifying Life Event. Qualifying life event (QLE) - Glossary
FTR, I haven’t done this myself, but I heard about it from someone who did. Please do your research to confirm.
We spent way too much on clothes and toys.
I disagree with others about “best of” for long term items like car seat. Anyway, check consumer reports and decide for yourself.
My only advice would be not to spend money buying the latest craze in toys.
Most parents buy toys based on their own liking/TV ads and not kids.
Kids like playing with pots & pans way way more than any toy.
Instead save that money for their future.
The quality varies quite a bit I think and, as a new parent, you’ll likely be scared of the smallest things. We have a great pediatrician, but talking to the nurses there will always result in a recommendation to come in for a visit. After a few useless visits, the next time we called and were told to come in, we asked the nurse “what will a doctor do for this?” and the nurse basically said “nothing, they’ll just tell you to let it clear up on its own, but you should still come in to hear them say it”.
The nurse line for our insurance provider is less likely to tell you to go see the doctor, but they still lean that way. At some point the cost is less the money and more the time and effort involved in getting the kid there (especially a one month old in the middle of the winter).
True, but replicating breast milk is not easy and formula does differ quite a bit. If you actually look at the ingredients on most formulas, it’s mostly sugar and not the kind found in breast milk. A few premium ones exist (we used Plum Organics) which are closer to breast milk. A lot more expensive, but personally, I think it was worthwhile. Also, the smell of other formula was nasty (sort of like rotten fish) while the Plum one was not quite as bad.
I have found the nurse line to be totally useless. “Is the child running a fever?” Ok make an appointment. They just don’t seem capable of doing much besides some really basic hand holding like how to get a child to take medicine, or how to convert armpit to internal temp.
I will say that you should take your baby in the first times they get sick, even if it is nothing because your Ped. will likely give you some future guidelines on when to bring the baby in and when not to. I don’t want to quote what my Ped has told me because IANAD, but needless to say we stopped taking her in for every cold and now only take her in as needed (last visit for being sick was Nov 2016).
This doesn’t sound financially sound. What if you move or you’re out of town when the baby arrives? What if the doctor leaves? Things can happen, no reason to add extra financial risk. Unless they are providing some benefit for you in prepaying, there’s no reason to do this.
You can pay with a cashback card and have the FSA reimburse you later (depending on the specific rules of the FSA administrator, but I’ve never heard of one that won’t issue check reimbursements) - although I’d argue that the cashback is taxable income ;). However, as someone else mentioned, this question appears to specifically apply to the prepaid expenses. Except in specific circumstances, prepaid expenses are not FSA eligible. If you pay this year and the expense isn’t incurred until next year, you aren’t allowed a reimbursement from the FSA.
Recommendations (new dad of 7 months here)
Thrift stores for ALL clothes.
Register at Target and Babies R Us, and don’t tell people, both stores will give you a discount on the stuff that you aren’t bought by others.
Formula is uber-cheap at Aldi’s, and our baby liked it better than any other brand.
Diapers, also from Aldi’s.
Do NOT skimp on brand-name diaper-genie, but when full, just cut off the bottom of the poop-caterpillar-nightmare off and hold the diaper-monster over a trashbag. Give a little jiggle and all the terrible stuff flows into the trashcan, tie off the newly-emptied genie bag, and it’s good as new. This sounds gross, but it’s really not, and those DG bags are crazy expensive.
My wife used craigslist and something called “swap n sell” in our area to find great-quality baby furniture and a glider chair at about 20% of retail cost. But check for recalls on all used items you buy, there are tons of these for baby items!
Finally, use grandparents and aunts, etc. and get 2 nights (or more) per week where someone comes over and cares for the baby while you sleep (aside from nursing). This will keep you sane and allow you to do all the things in the day that you need. Also, they’re free!
As others have said, evaluate and decide what you might want. We hated the diapergenie (luckily we got ours from our friend). You have to shove dirty diapers through jaws that catch your hand…just a bad experience.
Instead, we got an Ubbi pail which has a sliding cover over the hole diapers go in, along with seals to keep the smell in. It’s a bit more expensive, but it uses standard garbage bags (or reusable ones if you’re using cloth diapers) so you don’t have to pay a ton of money for the refills. Smells about the same as a diaper genie, but a lot cheaper and easier to use.
Our DR did that with us too.
I thought it was strange too, and even contacted our health insurance about it. They said baby deliveries are the only service that DRs are allowed to bill for before the procedure. (this was about 10 years ago, and my memory could be a bit off, but that’s how I remembered it anyway).
In our case at the time we had a higher deductible (like several thousand), and the DR’s office called our insurance to find out our deductible, and copays, etc, and used that to find out how much we owed, and requested that amount before the delivery date (this was at the first visit).
Of course between the time of our first visit and the actual birth, several tests and ultrasounds, etc were performed, and we had already paid out several thousand in medical bills, and meet most of our deductible, so I contacted the DR’s office and had them re inquire with the insurance company to get an updated bill, which they did.
I still ended up overpaying the DR for the baby delivery, and had a very hard time getting a refund (took like a year and threatening to sue for overpayment), but I eventually got my money back.
It’s been way too long since the birth of my first child to remember anything
particular other than my first look at her. That’s something you never forget.
I’ve read the entire thread and most of the advice sounds great.
All that I can offer is only tangentially financial.
Spend as much time as you can with your child. You can never savor it enough.
Read and talk to your child as much as possible.
You want to give him/her a happy and relatively safe childhood,
and the the best opportunity for success as an adult.
The example you set will outweigh ninety percent of what you say.
Remember to do the paperwork (usually in the hospital I think?), to request a SSN for the baby. With a March baby you’ll have plenty of time, but it takes a few weeks to get it.
Then you’ll be able to set up an ESA or 529 or UTMA for them if you’re ready to plan ahead financially. You can get a state tax break in many places for 529 contributions and you can gift a modest amount of appreciated stock (which should be almost anything you bought in the last few years) to the child and they can sell $1k worth of profits each year tax free and another $1k at a low rate before the kiddie tax kicks in and starts billing them at your rate.
Get lots of sleep now, you won’t later. Get everything that needs thoughtful planning done 2 months in advance - setting up the kids room, settling any complicated financial situations going on, cleaning house, interviewing babysitters, etc. if you’re going to make any daycare or in-home care arrangements, you should check those out early on too as good ones can take a while to find.