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NEW YORK (MainStreet)—When Matthew Streeter and his wife Adria set out to have a baby, they didn't anticipate having to cover the costs of pregnancy care until being turned down by Medicaid for earning too much money.

"You have to be practically homeless to qualify for Medicaid," said Streeter who receives a military pension from serving in the Armed Forces. "Pre-natal doctor's visits took a financial toll on us even though we have health insurance."

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The Brooklyn-based couple worked hard to squirrel away enough money to carry them through financial dry spells that Streeter's performance work perpetuates.

"Medical bills for routine check-ups will be the largest financial burden for us because my income as an actor ebbs and flows," Streeter told MainStreet.

The Streeter's daughter Olivia was born healthy on August 15, 2013 and because she had a single-artery umbilical cord as a fetus, doctors required the Streeters to pay out of pocket for sonograms. Sonograms cost anywhere from $250 to $500.,/p>

"My financial regret is not owning a home before Olivia was born," Streeter said. "Once we've been parents for longer than a couple of weeks, we will assess how much we're spending and create an accurate baby budget. In the meantime, Olivia's needs take precedence over our wants."

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The Streeters are not alone. About 70% of new mothers are more anxious about money since having a child, according to

"Money worries stem from costs associated with co-pays and emergency room visits for common baby illnesses like ear infections, costs resulting from home renovations and relocating, as well as the expense of purchasing bigger cars," said Jo Kerstetter, spokesperson with Money Mangement International (MMI), a nonprofit credit counselor.

MMI's Tanisha Warner advises families like the Streeters to communicate with the hospital billing department.

"The difference between medical debt and credit card debt is that there is a lot of flexibility regarding comfortable payment plans on medical debt," said Warner. "Hospitals will allow patients to choose the amount of the monthly payment in many cases."

The average cost to raise a child until the age of 18 is $241,080, according to the U.S. Department of Agriculture.

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"All human beings are relatively costly, and babies are really no exception," Kerstetter said. "They need all of the same necessities of their grown up counterparts, just in a smaller, baby-sized format."

Luckily, there are steps couples can take before and after pregnancy to ensure financial preparedness, which include creating a spending plan.

"When creating a budget, parents like to focus on the obvious, concrete items, such as diapers, formula and clothes but these may not even have the biggest impact on your budget, which is child care," said Kathleen Grace, a CFP and managing director at United Capital with $17 billion in assets under advisement. Other steps include:

  • 1. Take control of your debt now by creating a repayment plan. "You'll be surprised at the amount of money you can save once those monthly payments are out of the picture," said Kerstetter.
  • 2. Explore your health coverage options. Checkups alone for baby can cost more than $100 per visit not to mention pre-natal care. "Health insurance premiums will likely increase. Early childhood incurs many doctor visits and a co-pay for each visit," Grace said. "Add your child to your policy as quickly as possible after birth despite the cost."
  • 3. According to a recent study by ChildCare Aware of America, childcare cost for an infant can average more than $300 per week. "Some parents may have a grandparent or other family member/friend willing to fill this role. For the rest of us, this may be the single largest immediate budget impact to plan for," said Grace.
  • 4. Practice living on a baby budget. "If you are planning to live on one salary, start now," Kerstetter said. "This will give you an opportunity to make the necessary lifestyle changes and cutbacks before your bundle of joy arrives which will also make for a much easier financial transition."
  • 5. Ask for and accept donations. Consider allowing family and friends who have expressed a desire to buy special items to contribute. Enroll in a registry.
  • 6. Communicate with your partner. Determine what is important to each of you when it comes to raising a child. Be on the same page and understand each other's values and beliefs about money using the Money Mind Analyzer.
  • 7. Update your estate plan to include a guardianship designation.

--Written by Juliette Fairley for MainStreet