Saving for the Expected: The Baby Fund

I often hear the old adage, “Save for a rainy day”, in reference to unexpected occurrences such as unemployment, health issues, and accidents. But I rarely hear people express the need to save for major expected expenses that can just as easily derail your budget and potentially lead to unwanted debt.

Last year we were fortunate enough to bring baby Sweet Pea into our home. Although we have great health insurance, we still knew that we had to make room in our budget for medical expenses  associated with her birth.

Shortly after we found out we were pregnant, I started doing my research on the estimated costs for a routine delivery in our area. I looked into various doctors, hospitals, etc. and after extensive online research and numerous phone calls I felt confident estimating the cost to deliver our baby.

We put our emergency fund savings on hold for a few months and funneled all of our savings into “The Baby Fund”. After this was fully funded we returned to building up our emergency fund.

My estimation for the cost of her birth, was roughly accurate. The only reason we had to dip a little into savings was an extra day in the NICU.

Knowing that our baby was paid for without going into debt, allowed us to fully enjoy her without worrying about finances.

The Cost of Flossing

A few months ago Tim and I went to the dentist. This was the first time for us to go in over 2 1/2 years since our student insurance didn’t cover dental care. I have always had a healthy mouth so imagine my shock when my dentist said I had seven cavities!

The dentist told me that my teeth were healthy where I brushed, but that cavities had developed in the areas where I should have been flossing. I learned there is a reason that dentists encourage regular flossing.

My laziness and ignorance ended in me having to go back to the dentist twice more and spend around $200 for the fillings. My dentist told me it would have been around $500 more if I would have gotten the white fillings.

Since Tim is a better flosser and also ended up with a couple of cavities, I attribute some of my own cavities from staying away from a dentist for 2 1/2 years (which I never plan on repeating). But the development of the other cavities I blame on forgetting to floss. If I would have been a regular flosser I’m guessing I would have saved at least $100, the time of my appointments and the pain of dental work.

I am now a regular nightly flosser and believe that the minute-and-a-half it takes me to floss and the $0.99 I spent on floss is well worth it. Flossing is just one example of how a little time and money upfront can save a lot of money and pain in the long run.

The Importance of Insurance and Savings

A few weeks ago I was struggling with our toddler to get his shirt on. I didn’t realize how close we were to our desk and before I knew it he smacked his face on the corner. He cut himself right above his eye and the gash looked bad. My husband came home to look at it during lunch and we decided he needed medical attention.

We took him to our pediatrician who took one glance and sent us straight to the pediatric emergency room next door. Our son ended up getting two stitches.

Although this wasn’t a pleasant experience for us it would have been much worse if we didn’t have two things: health insurance and savings.

We have been without health insurance before and it is very scary. We’re very thankful for a job with benefits, but even if Tim’s company didn’t provide insurance it’s important enough to us that we would pay for it ourselves. Medical emergencies can happen anytime and huge bills really put a crunch on your budget.

We also felt calm because we knew where the money to pay for this would come from: our emergency fund. We wouldn’t need to put the bill on a credit card or go on a payment plan with the hospital. We will be able to pay the bill in full, on time, without any interest.

The only affect this bill will have on our budget this month is that we can only put in about 1/4 of what we normally add to our savings because the rest we will use to pay the bill. We didn’t technically have to take anything from our savings because we haven’t yet deposited money to our savings account this month.

With the development of this bill we will be put back one month on our savings plan, but we know that this could have been much worse. I am truly grateful that we are in a position to have health insurance and emergency savings.