Tales from the Wallet: Financially Preparing for Baby

financially-preparing-for-babyWe’ve talked about some of the major financial milestones that can affect your life, like wedding and grad school — but we haven’t yet talked about how to financially prepare for baby. (We have talked in general terms about family planning, as well as when the “best” time to get pregnant is.) So here are the questions: how can you prepare financially for a baby?  What considerations should factor into the decision to start trying?  Mamas, what are your best tips for the women still just pondering it? 

First, a story.  I remember being pregnant with my first child and reading a story somewhere about how babies were so expensive.  Yeah yeah yeah, I thought.  Sure, there are big purchases like a stroller and a crib.  But a baby shirt is like $5! Diapers are like, what, $20 a box?  NBD.

Stopped laughing yet?  I didn’t get it — in a big way.  CHILDCARE is the huge expense for children.  It really escaped my notice that if I wanted to work for 40 hours a week, then someone would need to watch the baby for 40 hours a week.  In most states, public school doesn’t kick in until kindergarten — aka, age FIVE.  So that’s five years of childcare — per kid — that you need to figure out.  We’ve talked about the pros and cons of different childcare arrangements over at CorporetteMoms, and last week we talked generally about parental budgeting — but I thought we’d bring the conversation over to Corporette.

For my $.02, for those of you just considering a baby, I would say:

  • Lock down health insurance.  I would strongly, strongly, strongly advise you to get health insurance (a good policy!) before you consider having a baby.  Doctors’ visits add up, as do ultrasounds, visits to specialists, and the ultimate labor and delivery bill.  (I believe my copay was $1000 for each pregnancy, but for my relatively uncomplicated births I recall seeing that the hospital bill for Jack was $16K, and for Harry it was $14K…. I definitely would not have wanted to be facing either of those numbers without insurance.)
  • Know your maternity leave policy. Note that you are only eligible for FMLA leave if “you have worked for your employer for at least 12 months, and have worked for at least 1,250 hours over the previous 12 months, and work at a location where at least 50 employees are employed by the employer within 75 miles.” We’ve also talked on here about negotiating for maternity leave at the interview stage, as well as (on CorporetteMoms) what an ideal maternity leave would look like.
  • Consider getting short-term disability.  Pregnancy may or may not be covered — and it may not be covered as a preexisting condition — so it’s best to think about this before you get pregnant.
  • Know if any vesting periods apply to you.  Stock options, pension plans, 401K matches, etc — if any of those employee perks may apply to you, take a look so you know what the situation is. If you’re only ten months away from being fully vested in a big perk, you may want to wait to start trying for another month or two.
  • Get a budgetary cushion.  You will need some cash for doctors’ copays and baby essentials, and you’ll eventually be able to roll that cushion over for childcare expenses.  In a perfect world I would suggest you have at least $1K-$5K cash, but obviously a lot of people have gotten pregnant with a lot less and been fine.
  • Talk to your doctors.  Finally, if you haven’t yet started trying to conceive, a minor note — talk to your doctor (and have your partner talk to his doctor) before you start.  My doctor suggested I get some more shots (the MMR vacine, if memory serves) that I could not have gotten while pregnant or nursing, and I also had genetic testing done. Unexpected health complications can be expensive, so being proactive here can really help.

Meanwhile, once you’re pregnant, I would suggest:

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The Next Step: Services

upgrading-personal-servicesWhat are the best ways to upgrade personal services such as massages, food delivery, personal training, and more? More importantly, where is the middle ground between DIYing it and, for example, hiring a personal chef? How can you outsource and save time in some areas of your life so that you can focus on spending your time (and money) on the things you enjoy the most?

We’ve already talked about a bunch of stuff in our Next Step series: how to step up your workwear, upgrade your handbags, graduate from IKEA furniture, and buy better shoes — but something else that I thought might be interesting to talk about is services. I came up with a few ideas for areas such as massage, food, exercise, hair/beauty, and home decor/organization — what other services do you think are upgradeable? What other “middle ground” approaches do you know of?

Note: These generally go in order of money required for each level (i.e., Level 1 can be done with little to no money), but obviously other factors come into play here such as time, energy, and desire. Of course, if you’re really into a certain category, you may want to do ALL the levels, all the time (money permitting); you may also want to pursue it further as a hobby or even a future career. Where possible I’ve tried to include thoughts for that as well.

These were my ideas for each category:

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Tales from the Wallet: Refinancing Student Loans (Guest Post)

refinancing student loansHave you refinanced your student loans, or are you looking into it? We’ve talked about tackling huge school debt, paying down debt vs. saving, getting financially prepared for grad school, creating a money roadmap, and switching from a lawyer’s salary to a student lifestyle, but we haven’t discussed refinancing student loans. Today, Blonde Lawyer (the name she uses to comment on Corporette posts) shares her experience of refinancing with SoFi, one of a growing number of peer-to-peer lending companies (CommonBond is another) that offer student loan refinancing. The author is including a referral link of her own, but Kat / Corporette is not being compensated in any way for this post — it sounded like an interesting topic for readers to discuss, and hopefully this one reader’s experience will be a launchpad for discussion.  Thank you for writing this, Blonde Lawyer!  Here’s a recent WSJ article and a Reuters article for further reading on the topic. Update 2015: Blonde Lawyer has started a blog with more information.

I have noticed that a lot of Corporette readers are interested in potentially refinancing their student loans. I suggested to Kat that this would make a good “Tales from the Wallet” post and offered to write about my experience refinancing with SoFi. Hopefully there are other posters who refinanced with one of the other major players that can write about their experiences too.

So a little bit about me: I graduated law school in 2009. I went to an in-state school with in-state tuition. I paid my tuition 100% with Stafford loans ($59,500) and also took out living expense loans ($34,072) through a private loan company for a grand total of $93,572 in loans. After graduation, I was most worried about my $34,072 in private loans. My husband co-signed them and they were not dischargeable if I died or became disabled. The interest rate was a variable 8.61% with a 19% cap!!! I had one other issue with this company. I had selected a standard 10-year repayment for all my loans, but once the private loans entered repayment, the math wasn’t adding up to me.

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The Pros and Cons of Thrifting for Workwear

thrifting-for-workwearWhat are best practices for getting workwear at the thrift store?  What are the pros and cons?  Reader JP wonders:

I’d love to see some people’s thoughts on THRIFTING. Macklemore seems to have popularized it. I’ve become an avid thrifter in the past year. This week I bought a Tory Burch shirt for $2. Curious to see the opinion of others.

Great question, JP! We’ve talked about workwear on eBay before, but not this (and now may be a great time to revisit that discussion — please tell us your favorite eBay finds in the comments!).   I know there’s been a fair amount of discussion of thrifting in the comments, and I believe one reader even set up her own blog to catalog her thrift store finds.  Personally I’ve never gotten into thrifting as much as I perhaps should have — in New York I’ve always felt that a) bedbugs are a concern in anything cloth and b) the hardcore fashion people are getting the good stuff anyway, so why even bother?  (I’ve read far too many profiles of random stylists and PR women to hear about how their ritual is waking up at 6 AM to go thrifting, or how the women at the consignment store just know them, etc., etc.).  My reluctance aside, though, thrifting is great for the environment as well as the wallet (and other reasons), so it’s a great hobby to get into.  I’ve always heard that the best way to go thrifting is to:

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Tales from the Wallet: Financially Preparing for Grad School

financially preparing for grad schoolWe had a great discussion a few weeks ago about wedding finances, and now it’s time for the next post in our Money Milestone series:  grad school. We’ve talked about how to adjust your new student budget once you get to grad school, how to pay off student loans, how to juggle grad school and a full time job, and even whether you should get an MBA — but not this. Some of the best tips came from folks on the Corporette FB page and some of my personal FB friends, so a huge thank you to everyone! (Check out U.S. News & World Report’s Paying for Graduate School Guide for some additional advice.) (Pictured: J.Crew Factory Magic Wallet, $14.50.)

Before Grad School

  • Live like a student before you go. Keep your expenses down while you’re saving up — and create a new budget. This helps you save more, and also prevents culture shock once you have to dial back your lifestyle when you get to grad school.
  • Manage what you’ve already borrowed. Form a strategy to pay down your existing debt. In some cases you may even want to postpone applying to grad school until you have more of a handle on your finances and achieve a higher credit score (which can earn you lower interest rates). Consider deferring your undergraduate loans if it makes sense for your financial situation.
  • Make sure you know the numbers. In a recent post, Above the Law mentioned a new, “brutally honest” student loan calculator that shows you your future monthly payments in comparison to your expected salary after earning the degree.
  • See if your current employer offers tuition reimbursement. It may be slow going but you can pay for a grad school degree through this method alone!
  • Set up a 529 plan for yourself. While you’re saving, you get a deduction on your state taxes, and you can then use that account to pay for your grad school expenses. If you have money left over in the plan, you can roll it over into your kids’ plans. (Rules vary widely by state.) Resist the urge to raid your 401(k) for tuition costs.

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The Next Step: Professional Clothes

workwear next stepHow to Upgrade Your Work Wardrobe | CorporetteA lot of people know where to go for inexpensive professional clothes — and then they know the brands that celebrities wear.  But the middle ground can get confusing for people — particularly, how to step up your game when it comes to fashionable workwear.  We talked a few weeks about what the next step is for furniture (based on a commenting thread a while back), and this week I thought we’d talk about the spectrum for professional clothes. (Obviously, some of these brands could fit in multiple buckets — any big disagreements, though?)  Readers, where did you shop when you started your careers — or when you need budget pieces?  What was your next step, and the step after that, and the step after that? When did you notice a big change in quality?  Am I forgetting any brands?  What are your top 3 in each bucket? 

Bucket 1: Budget Fashion

  • Dorothy Perkins
  • Express
  • H&M
  • Loft
  • Modcloth
  • New York & Co.
  • Old Navy
  • Target
  • Zara

Bucket 2: Midlevel Fashion

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