2015 Financial Resolutions for Parents-to-Be
Congratulations: You’re expecting a baby! Becoming a parent creates wonderful new experiences – but it also comes with a hefty price tag. In fact, the U.S. Department of Agriculture estimates that it’ll now cost the typical American family approximately $245,000 to raise a child from birth to age 18. Here are three financial resolutions for 2015 that can help you prepare for the responsibilities of parenthood.
Resolve to Get Covered
Now that you’ll have a new family member, it’s even more important to acquire and maintain appropriate insurance coverage, says USA Today. And because of the Affordable Care Act (ACA), you may encounter changes to your family’s health benefits or insurance options in 2015. Consider the following when purchasing an insurance plan through the ACA’s online exchanges:
- Availability and subsidies. The ACA expands Medicaid availability for many low-income families (including children) and offers insurance cost subsidies for many middle-income households, says HealthCare.gov.
- Free preventive care. According to Consumer Reports, the ACA mandates that all insurance plans must now offer free proven preventive care – including new baby essentials, such as immunizations and breastfeeding supplies.
- Special enrollment period. The open enrollment period for purchasing 2015 insurance coverage through ACA online marketplaces ended Dec. 15, 2014, but new parents may qualify for a special enrollment period extension, says HealthCare.gov. Consult the program’s website for further details.
The ACA also impacts employer-sponsored plans in certain ways, including:
- ACA protection for all plans. All insurance plans offered in the United States, including employee-provided coverage, must meet with certain protections and benefits ensured by the ACA, including the free preventive care mentioned above, according to Healthcare.gov. Insurers may not set lifetime coverage limits or cancel your plan if you or insured family members (such as a new baby) get sick.
- Changes to premiums and deductibles. In some cases, premiums and deductibles of employer-based insurance packages may have been affected by the ACA, says the Kaiser Family Foundation. Check with your HR department to understand whether a change in deductibles or premiums applies to your family’s plan.
Resolve to Make the Most of Your Family Benefits
Forbes says the birth of a new child is an ideal time to begin using family benefits offered by your employer. Some of these benefits might include dependent care flexible spending accounts (DCFSAs), flexible spending accounts (FSAs) and health savings accounts (HSAs).
- DCFSAs allow you to contribute pre-tax dollars from your paycheck toward a dedicated savings account for dependent care, such as day care for your child, according to the program administrator, FSAFEDS.
- FSAs can be used for certain out-of-pocket health care costs for you and your family, notes Healthcare.gov. You contribute pre-tax dollars from your paycheck to an FSA, and your employer may also make contributions, the site says.
- HSAs are similar to FSAs, in that they stash away pre-tax dollars to be used for eligible health care expenses. However, HSAs are only available to people enrolled in health insurance plans with high deductibles, according to Healthcare.gov.
Check with your employer’s human resources department to see which types of accounts are available to help you plan and save for your family’s future.
Resolve to Live on One Income
If you’re part of a two-worker household, living on one income can be a valuable exercise in frugality to make do with less, says the American Institute of CPAs (AICPA). If one parent is considering leaving work to stay home with a new baby, the organization suggests living on just one income as a trial run, in order to practice for upcoming financial changes and reduce expenditures. Saving the second income — or using it to pay down debt — can help you prepare for your family’s future needs.
The new year often brings changes — and few are more joyful than a new child. Help your new family make the most of 2015 by putting some smart financial resolutions into practice.
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