Quiz: Are Your Finances Baby-Ready?

Ask yourself these questions in the months before your baby comes.

1. How will your health insurance cover maternity costs?

Even if you have healthcare coverage, giving birth can be expensive. Now’s a good time to review your plan and make sure you understand how your coverage works—so you don’t get blindsided by medical bills later.

Talk to your company’s human resources representatives or call your insurance provider.

2. Do you know your company’s family leave policy? 

How much time can you (or your partner) take off work—and is this leave paid or unpaid? The answers to these questions depend on your company’s policies as well as the laws in your state.

3. What’s your budget for daycare?

Even if you or your partner plan to leave work and assume full-time parenting duties, chances are you’ll need childcare at some point. Now’s the time to research your options, get a sense of daycare costs in your area, and think about what you can afford.

Some daycare centers have long waiting lists, so it’s best to do your visits now and get your application in early. In addition, talk to local family members and close friends—and know who you can depend on in an emergency.

See also: Are There Extra Expenses Hiding in Your Daycare Fees? 6 Things to Look Out For

4. Where can you save?

Babies come with lots of new expenses—including diapers, food, clothes, gear, and more. Your daily spending priorities will probably have to change.

If you don’t already have a household budget, now’s the time to take stock. Take a week or a month to track your finances, identify where your money goes, and find opportunities to save. You’ll thank yourself later.

5. Do you have life insurance?

It’s no fun to think about death in the midst of bringing new life into the world. But if you’re about to have a child, it’s necessary to be prepared.

A life insurance policy ensures your child will be financially cared for if something happens to you or your partner. There are several different varieties of life insurance, including:

Term life insurance

This covers you for a fixed period of time—such as 10 or 20 years. Term life insurance policies are typically the least expensive, and will provide a payout to the beneficiary if you die within the specified period of time.  

Permanent life insurance

This type of insurance lasts your whole life, accumulating tax-deferred cash value the entire time. When the cash value reaches a certain point, you can borrow against it or even cash it in, usually for a fee.

Term life insurance is the most common kind for most new parents, and can be pretty affordable—especially if you’re starting young. Permanent life insurance often offers complex policy terms, so be sure that you fully understand how your plan will work before you sign on the dotted line. In most cases, term life insurance is a better value.

6. Do you have emergency savings?

It’s also kind of a bummer to think about the possibility of you or your partner losing a job just as your new baby is born. But it happens. And with a little one dependent on you, this is an even more terrifying prospect than it was before.

If you don’t have a savings cushion already, now’s the time to start building one. It’s a good idea to have enough in your account to cover about three to six months of expenses.

7. What’s the deal with your debt?

With all these new expenses coming your way, now’s the time to take a second look at your debt. If you have credit card debt, give your company a call and see if they can help you out with a lower interest rate.

If you have student loan debt, you could reduce your monthly payments significantly by refinancing. In fact, many people who refinance are are able to reduce their payments by $250 a month or more. See how much you could save.

A new baby comes with new financial responsibilities. If you can take action now to cut spending and shore up your savings before the due date, you’ll be able to keep the focus where it belongs on the big day—on your new baby.