How to plan finances before planning a baby
The first thing that hits you after your initial euphoria on discovering pregnancy, is the number of doctor visits and tests which become a part of your routine. Even in the early stages, it is easy to assess that having a baby is a costly affair! It is never too early to take stock of your financial situation and to figure out how to financially plan for a baby.
1. Medical expenses
1. Medical expenses: After the initial confirmatory tests, monthly consultation fees with gynaecologist, follow-up tests, medicine bills and the ultrasound scans need to be factored in. Account for 10-15% additional expenses in case of any complications, or unforeseen emergencies.
2. Hospitalisation expenses: Count in a couple of days of hospitalisation for a C-section birth and a little lesser for a natural birth. Check with your hospital in advance. If you opt for a midwife at home, the expenses are different. The average cost for deliveries at popular urban hospitals is anywhere from between 75,000 to 2Lakhs rupees (BBC,2015)
Tips: 1. Opt for the hospital only on the D-day and consult your doctor at his clinic during the pregnancy. Also it's cheaper if the gynaecologist carries out the ultrasound scans himself instead of sending you to a radiologist.
2. Shopping for the baby & You
While you wait to hold your little miracle, you will be tempted to buy every baby-product in sight, more so with the wide range of baby clothes, furniture, accessories and toys available! Keep in mind that your little peanut will grow incredibly fast, and most of the baby clothes and toys will be used for a very short time. Do look at all options for buying furniture for your nursery as well as strollers, prams, and car-seats before you decide to buy.
1. Baby foods: Good brands of baby foods add to your grocery bill! Ensure breastfeeding at least until 6 months of age.
2. Storage needs: Bringing home a baby means a new person at home, however small! To store the baby's nutrition, the cans, the bottles and the dozens or small necessities, you'll need new storage spaces built if you don't already have them.
3. Kids' furniture: Whether it's a high chair, a cradle or an enclosed safe bed, be prudent and opt for something which lasts the child for at least a few years.
4. Maternity Clothing: Well, it's important to feel good while you are expecting, so put in some money for maternity wear that make you look pretty and feel comfortable.
Tip: Until about two years, babies do not recognise all the changes around them well. So, if you're getting a swanky new toy, it's more to for your own satisfaction. So, swap the expensive toy for something more affordable or even go for a rental toy or buy pre-cared equipment.
3. Other Essentials
2. Day care or Nanny: If both of you are working, you will be faced with a difficult decision - should you continue to work, or should one of you stay home with the child?. While this decision is yours alone to make, weigh your options. A good nanny or day care may be your lifeline if you are determined to be a working mother. Choose one with care.
3. Medical Insurance: If you do not yet have any medical insurance, now is the time to buy a policy. Find out details of what you will be paid, and a list of hospitals covered by the insurance provider. The majority of policies provide a maternity insurance coverage not exceeding Rs. 50,000.
If you have goals and deadlines for your professional life, why not do the same for parenthood? Not only will that help you budget for it but also allow you time to spend with your child as well. Consider a balance between your career and spending time with your new born, remember these precious moments do not come back :).
Tip: Small corpus amounts placed in recurring deposits or mutual funds will go a long way in easing your expenses when you start your baby planning in earnest.