Financial Planning for Pregnancy

Pregnancy was an incredibly exciting time in life for me, but the financial impacts were a bit daunting. As a financial analyst, I wanted to plan and figure out my financial attack beforehand. What I found was little to no information on this. The age-old saying, “it will happen, when it happens” seemed to trump any planning. When my doctor informed me that the majority of women will get pregnant within three months of trying, I was a little surprised. I thought it took a bit more effort than that, but for me it didn’t. I was pregnant within three months, just like the majority of other women, the rule not the exception.


For financial reasons, this is great. It gives many women a choice over when to get pregnant.  I’ll write on financial planning for IVF and other pregnancy options later on.


Why is this important financially? Three big reasons, medical insurance deductible, FMLA, and short-term disability insurance.


First, most medical insurance deductibles reset in January, while others reset at other times in the year. Being able to conceive in three months, gives women the option to plan their entire pregnancy under one deductible. For example, if you wanted to have a baby in 2015 and you have a calendar year medical deductible, you could get pregnant between November 2014 through March 2015 and almost all your costs would go toward one deductible during 2015.

Note that your first doctor appointment after conceiving is six weeks after you have a positive pregnancy test.


If you have a high deductible, like 5,000 or 10,000, this is well worth planning out.
Second, FMLA lets you take off twelve weeks of leave from your employer without repercussions. To qualify for FMLA, you need to work for your employer for twelve months before taking leave. For more information on the exact rules, go here. http://www.dol.gov/dol/topic/benefits-leave/fmla.htm


Third, short-term disability is usually provided through your employer and will pay you 60% of your income while you are out on leave. Most policies have a 9-10 month probation period, which means you need to have short-term disability insurance in place  before conceiving for it to be effective.
Also, there are a few financial things to take into account when calculating how much bring home income you will receive from short-term disability insurance.


First, week one after delivering your baby you do not get short-term disability insurance. It does not kick in until week two. Second, you get six weeks short-term disability for a vaginal delivery and eight weeks for a cesarean, but you only get paid for five weeks and seven weeks, respectively. Third, figure out how much your short-term disability check will actually be. When I received my first short-term disability payment, it was lower than I expected. I thought I would get 60% of my bring home paycheck.


For example, if I made $1500 every two weeks and paid $200 for insurance and $300 for taxes, my usual bring home check would be $1000. I thought 60% of this, $600, should be my short-term disability payment, but it wasn’t. So where did I go wrong?


Here’s the math.
$1500 x 60% = $900
Less insurance $200
Less taxes ($300 x 60%) =$180 roughly
Actual bring home = $520


Insurance, flexible spending accounts and other paycheck deductions are not decreased by the 60% payout. So your short-term disability paycheck will be lower than 60% of your usual paycheck, if you have any of these types of deductions.


I hope this information helped you. I will continue to write on ways to mitigate costs and grow wealth. Have a great day!