Why And How Physical Therapists And Occupational Therapists Can Prepare Financially For Having A Baby – Part 2

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Financially Preparing Physical Therapists And Occupational Therapists For Having A Baby

Having a baby is both exciting and stressful – my wife (an occupational therapist) and I (a physical therapist) are well aware as we recently welcomed our baby into the world.

There are many justifiable reasons for this stress and, as already highlighted in Why And How Physical Therapists And Occupational Therapists Can Prepare Financially For Having A Baby – Part 1, a change in your financial state is one of them. If you haven’t read that article yet, I recommend doing so before moving on here as it details how having a baby will impact both the income and expense sides of your budget, thereby giving you a better understanding of the recommendations listed in this article.

I completely understand how this time in your life can be quite hectic and overwhelming. That is why this article will list out recommendations not just on what to financially prepare for, but when to do so based on the estimated arrival of your baby. In other words, you will see items categorized as follows:

  • Things To Do Before Your Baby Arrives
  • Things To Do Immediately After Your Baby Arrives
  • Things To Do Soon After Your Baby Arrives

Let’s get started.

THINGS TO DO BEFORE YOUR BABY ARRIVES

Items covered directly below should be given priority consideration as they can take quite a while to complete and they should be completed before your baby arrives. The fewer items you have to complete after your baby arrives, the more time and energy you can devote to your baby.

Pick Up A Side Hustle

As a physical therapist or occupational therapist, you have many opportunities to improve your income stream. Pick up a side hustle by checking out The List Of Side Hustles For Physical Therapists and The List Of Side Hustles For Occupational Therapists to generate some extra income. 

I personally found working prn home health and for Luna Physical Therapy to be incredibly lucrative thereby making a huge difference when preparing for our first baby.

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The time commitment required for side hustle jobs can be flexible for improved work-life balance and, when the baby arrives, you don’t have to continue with that side hustle if you don’t want to. But, when it’s 2am and you’re out making an emergency diaper run, you will be glad you put in those extra temporary hours to bolster your financial security.

Create a Registry

While you’re working on increasing your income, you can also decrease your expenses by creating a baby shower registry. Why not provide a list of items you actually need to those who already intend to purchase a gift for your baby?

Much like a wedding registry, this will help decrease expense on purchasing items out-of-pocket, minimize the likelihood of redundant gifts, and also provide the opportunity to return listed items you later decide were not actually needed. 

Contribute Money to Optimal Accounts

If you’re looking for a place to stash money that you plan to spend on your baby in the near future, a be sure to click here to read more about how a health care flexible spending account and how a dependent care flexible spending account can both help you depending on your financial needs. 

Long-Term Disability Insurance

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Hopefully you’ve already purchased long-term disability insurance since it’s best to purchase this at the start of your career. If not, getting this now is more important than ever with a baby on the way since it will provide income in the event that you become disabled and can’t support your family. Still not convinced? Read Why Allied Health Professionals Should Consider Purchasing Long-Term Disability Insurance.

Having physical therapy or occupational therapy long-term disability insurance before your baby comes can make things much easier on you too, because, when your baby arrives and your monthly expenses increase, all you will have to do is increase the amount of your policy. Even better, when you increase your policy you may be able to avoid going through the medical underwriting process all over again. This is much better than trying to purchase a policy after the baby comes.

Purchasing a long-term disability policy is quite a unique process for physical therapists and occupational therapists, so it’s easy to be misled and spend a considerable amount of money on a policy you may regret. That’s why I purchased my policy with Pattern because they are independent brokers who are very familiar with the type of policy physical therapists and occupational therapists need. You can use Pattern too by clicking here to get started. 

Life Insurance

If you already have a significant other whose financial state would dramatically change for the worse if you were to unexpectedly pass away, I hope you have already purchased a life insurance policy. 

In fact, like long-term disability insurance, life insurance is typically cheaper to purchase when you are younger and healthier. That is why I recommend purchasing a life insurance policy if you are expecting to have a baby in the near future and you haven’t purchased a life insurance policy yet. 

I have written extensively about the different types of major life insurance policies – you can read more about each of these below:

For the large majority of physical therapists and occupational therapists, term life insurance is the way to go. Not only can you use Pattern to purchase your long-term disability insurance policy – Pattern can also help you purchase your term life insurance policy as well. Click here to get started.

Have a Will and/or Trust Drawn Up

Since you will be expecting a new addition to your family, you should make legal arrangements that stipulate who would inherit your assets and care for your baby in the case of your passing. Yes, this is a bit gruesome to think about, especially considering how you are preparing to celebrate bringing new life into the world. Nevertheless, you should be prepared for the unexpected because you want to make sure your baby is taken care of.

When choosing your baby’s guardian, be sure to consult with whomever you have in mind as you don’t want them feeling uncomfortable with this responsibility. 

Once everything is decided, meet with an estate planning attorney to have the appropriate legal documents drawn up. 

Check Your Credit

When was the last time you checked your credit? Can you imagine having your baby arrive and then trying to purchase that minivan you have been eyeing for several months, or trying to upgrade your residence to your dream home, only to be denied because an error in your credit report significantly impacted your credit score? 

Check your credit now to prevent this from happening. Be sure to use a reputable company to decrease the likelihood of identity theft. 

Continuing Education Units

Will your physical therapy or occupational therapy license be due for renewal within the next year? How will you feel about trying to find and complete courses to get the continuing education units you need after your baby arrives and you are likely very sleep deprived? 

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Get your continuing education units done now, while you have the time. I use MedBridge because they offer a massive number of diverse course options and I can take each course from the comfort of my home whenever I find the time. Best of all, MedBridge also offers home exercise program pictures which I easily print out and provide to my own patients. 

Sign-up with MedBridge by clicking here to save 40%!

THINGS TO DO IMMEDIATELY AFTER YOUR BABY ARRIVES

If you’ve finished the tasks covered so far, you are doing great! You have gotten so many important financial responsibilities completed and you will be thanking yourself in the near future when your baby arrives.

Let’s now help you get up to speed on what you should get done now that your little bundle of joy is here.

Obtain Your Hospital’s Temporary Birth Certificate and Order Your Baby’s Birth Certificate

When the day of your baby’s arrival finally comes, the hospital’s healthcare team should help you begin the process of obtaining your baby’s birth certificate. 

On day of our son’s birth, the hospital provided us with a packet of papers to fill out. The hospital required that the papers be filled out and returned out no later than 12 hours following the birth – otherwise a late fee would be applied. 

Once we turned in these completed papers, a temporary hospital birth certificate was provided to us. I was able to upload this paper both to the California’s Employment Development Department (EDD) for state disability and to my employer’s webpage for Family Medical Leave (FMLA) (place link to FMLA website) to verify that my time off from work was due to my son’s birth. 

During our time at the hospital, the hospital’s staff informed us that they had submitted the paperwork we turned in and we should request our son’s birth certificate 3 months after the day of his birth. We could either make this request in person, by mail or online at www.vitalchek.com.

If for some reason this process doesn’t go smoothly or you didn’t give birth at a hospital, contact your state’s public health department. For example, this would be the webpage to visit if in California.

Order Your Baby’s Social Security Card

The birth certificate is not the only item you won’t want to forget while still at the hospital. You will want to tell the healthcare team that you also want to apply for your baby’s social security card since the best time to do this is when you are still at the hospital. If you do end up leaving and realize you never communicated this to the healthcare team, you can still apply by going through a Social Security office – it may just cause delays in the process and is certainly a lot more effort. 

Thankfully, the packet of information provided by the hospital that we filled for our baby’s birth certificate process as noted above also included a request for our baby’s social security card. Therefore, we didn’t have to do any additional work. We were just told to expect the social security card to come in the mail 4-8 weeks after the day of our baby’s birth.

Be sure you and your spouse know your own social security numbers – we needed these when filling out the packet of information requested by the hospital. 

While getting a social security number for your baby is not required, it is recommended as you will eventually want it so you can claim your baby as a dependent when you file your taxes. Check out the Social Security Administration’s website for more information.

Add Your Baby to Your Health Insurance

You don’t want to find yourself without healthcare coverage for your baby when your baby is sick. While 30 days after the date of birth is the standard amount of time most health insurance companies allow for you to add your baby to your own existing health plan, getting this done sooner rather than later is often the less stressful move to make. 

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Keep in mind that, if you would prefer to change to a different health insurance company, this is a good opportunity to do so since the birth of your baby is considered a “life event” and allows you to change insurance outside of the open enrollment period. Just be sure to consider the addition of your baby on your plan when comparing the coverage of your current plan to the plans of other health insurance companies.

Update Your Beneficiaries 

Similar to the importance of having a will or a trust, keeping your beneficiaries updated will help ensure your invested assets are distributed to the appropriate parties in the case of your passing. Items you should consider updating are anyretirement accounts or other investment accounts.

THINGS TO DO SOON AFTER YOUR BABY ARRIVES

Wow! If you take a look back on this article, you’ll realize just how much you’ve gotten done already – congrats!

Now it’s time to look into the future and plan ahead.

Plan for Your Baby’s Future Education

Have you considered opening a 529 account for your baby’s future higher education costs?

I know you’re probably thinking that this is just planning way too far in advance – but hear me out. 

Just like with your retirement accounts, making investments early on can be huge. Warren Buffett did say that compound interest is the 8th wonder of the world, but people often forget that concept can apply to other investment vehicles besides retirement accounts.

Not sure where to start? Reading my Intro On Investing In A 529 Account For Your Child is a great place to start. Once you get a basic understanding of 529 accounts and you’re ready to open a 529 account, you can then learn about who should own the 529 account in Should Family And Friends Own Separate 529 Accounts and the benefits of placing a larger amount of money into the account early on in Why You Should Consider Frontloading A 529 Account For Your Child.

I hope you’ve found this information helpful so far. Feel free to refer back to Part 1 of this 2-part series as needed. Please share any questions or comments below. Personal experiences are welcome! 

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