Money Minute: 3 ways to get financially ready for a baby

By the time your little bundle of joy is 18, you’ll have spent a quarter of a million dollars keeping them happy and healthy. That’s why it’s so important to start getting your finances in order as early as possible. Here are three things you can do to financially prepare for a new baby.

Know your health insurance inside and out. The first few years of a baby’s life are also some of the most expensive, even if you have health care. Americans paid $4,823 in out-of-pocket costs for family health plans in 2014, a 3% increase over the year prior, according to the Kaiser Family Foundation. Plans with deductibles higher than $2,600 for a family come with the option of opening a Health Savings Account, and we highly recommend taking advantage of this perk. A couple can use an HSA to save up to $6,650 for medical expenses. All the contributions to your HSA are made from pre-tax earnings and the money can be withdrawn tax-free for medical expenses. While you’re reviewing your health plan, make sure it has you covered for well visits, vaccines, and major emergencies.

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If you can afford it, try living off one income. Some financial planners tell new parents to practice living off of one income for at least a year before they start a family. It's an exercise that forces you to start cutting unnecessary expenses and frees up cash for savings. You’re going to need that money later -- child care alone can cost a thousand bucks a month.

Check your family leave policy. Only 11% of workers have access to paid family leave. Look over your policy carefully before you start planning your time off.

How did you financially prepare to start a family? Send me a note on Tumblr.