Having a baby can be both exciting and expensive affair. Bringing a newborn into the world can offer you the most rewarding experience you can imagine. The bonding a parent builds is phenomenal and the emotional bond that is formed is unlike any other. Being prepared to have a child is often conflicted with the finances you own.
Despite the mid-night feedings, dirty nappies and other constant feelings of inadequacy, the fact is that you would not like to trade the experience for any kind of money which is a very good thing too. Having a baby can actually end up costing serious amounts of money. In India, the average wages required to raise children is around 50 Lakhs. This includes education, entertainment, and other things involved.
If you have planned your budget and draw a financial plan to follow it, this is no reason to panic, With some preparation, you will be able to raise your child, even if your income may leave room for little of something you desired. The average newborn will use up to 10 – 12 diapers every single day which calculates up to nearly around 3000 in a year.
In India, diapers cost around INR 12 which means INR 36,000 right there goes out of your pocket in a year.Not just this, then there is feeding equipment, bathing supplies, clothes, cribs, toys and so on and if you and your partner are both working parents, then child-care/nanny too.
As your baby grows, then you are going to look at the best education institutes to put them in, maybe also consider a couple of extracurricular activities to help build the personality and college degrees. All this definitely needs financial planning – and it is advised to begin planning as soon as you start planning to have a baby.
During the phase, motherhood is one of the beautiful phases for women and undoubtedly it also means a lot of responsibilities. When you and your partner are so involved with all the excitement and preparations for the arrival of the baby, financial planning takes a backseat. So, before you decide on starting a family, ask these simple questions that can probably help you get set on the finances again.
Can you afford to have a child?
If you are running into debts or any sort of financial problems already, it may not be the right time. If you have a planned budget for this, then go ahead.
How strong is the relationship between you and your partner?
Are you ready to commit to raising a child together for years?
How is your health?
Pregnancy will take a huge toll on the body. It’s advised to speak with your doctor to learn about any underlying health conditions before you attempt to get pregnant.
Is your home big enough?
Children do take up a lot of space, so this is another factor to consider before you plan to have a child. Shifting to a bigger place will also cost you money and you will need a budget for it too.
Financial Planning Tips Every Mother Should Consider
While you try and answer these basic questions, here are some tips to follow, so you can look forward to all the good times with having a baby.
- Get Insurance Soon
One of the first things to do for your family and child is to get protection. The two important ones include life insurance and medical insurance. Both of them are highly vital to take care of you and your children in case of any emergencies. You have the option to choose from modern life insurance policies that take care of your overall health support too. Some of the insurance policies do offer great packages which are value-for-money.
You can choose from basic to premium packages whichever suit your needs and offers you a better maturity value. It’s important to get your policy in place as soon as possible. On the other hand, medical insurances are also beneficial as it takes care of the family’s medical expenses. These save you from the troubles and unforeseen expenses at the time of a medical emergency.
- List out your goals
For a well-planned budget, it is advised to figure out your goals that are both short-term and long-term. With major life-changing decisions, you need to definitely work out a plan that requires immediate attention and the ones that do not. For a child to be financially secured, you will need to tailor the budget plans at different levels and provide the support.
For example, from daycare to schooling to its fees will all be replaced with more expensive fees such as college/universities, etc. With this, you should be able to build enough wealth to support your child’s needs. So, do take a moment to divide your goals according to cost and time.
- Grow those investments
You can surely rely on additional income here! Hence, building financial acumen is important. As early as possible, you must learn how to save and invest and put this into practice. Open your own savings account and investment accounts to know about the financial lingos and gain some experience.
A SIP is a great way to start. There are also few books, podcasts that can help you gain the knowledge you require to understand how to save, invest and increase your finances.
- Understand the earning potential
If you are already working and do not plan to leave the workforce, you can continue to save up a lot faster as it can be planned otherwise. If you leave your workforce, you may consider working from home during the peak earning years. You can even consider to do some freelance work to earn the extra pennies to support the family.
Working for a part-time, contract or some consulting work can also contribute to the household and will nevertheless, keep your skills sharp which can help you in the future too. If you are the only one where you have sole financial responsibility, you will definitely feel more confident about making most of the potential opportunities you seek.
- Continue building the emergency fund
So, while you are setting goals and budgeting your goals, remember to set aside some cash towards emergency too. You and your partner should establish funds for at least three to six months worth of expenses. These funds do come handy when you do not expect unplanned expenses such as medical costs, urgent travel back home, etc.
- Go slow on impulse shopping
While it is obvious that the excitement will make you want the best of things for your child, it is much more important for you to understand how to spend. This may mean, dropping off some things to save up money.
The purchases you plan on doing – maybe top-of-the-line clothes and toys can really add up to your finances and it may become difficult to keep track of your budget and save for the latter! Instead, you can consider shopping second-hand or checking the low branded things that may be available.
Till your child grows up, they aren’t going to care about the label or brand. All they need is warm and comfort. So, it is recommended to resist the urge to binge-shopping and rest assured, you will have more money for the things that are really important.
Aahna Gandhi is an enthusiast traveller, writer and a PR Professional. She likes sharing memorable moments from her travels and inspire others to live a life full of wonder. Known for her content, she has worked for travel, technology, lifestyle, health sectors as well as finance.
Apply for Loans of upto ₹5 Lakhs easily using your phone or laptop, and pay back on low EMIs