Pregnancy is often a milestone event in people’s lives, and it is best to prepare for it physically, emotionally, mentally and financially. Bearing a child comes with its share of costs, and budgeting for these can help you go through it without financial stress.
If you are planning to opt for pregnancy, it is best to financially plan for it well in advance. Even in the case of unplanned pregnancies, it is never too late to start.
Sai Bhosale, a chartered accountant and financial advisor shared her expert insights on how to financially plan for pregnancy and childbirth. “It is important to discuss with your spouse how the costs of having and raising a child will be borne. Whether you are partnered or single, you should ensure the financial responsibility of pregnancy and childbirth can be taken care of. Planning of pre-baby finances and post-delivery finances is crucial to get clarity and strategise effectively,” Bhosale says.
Make an exhaustive list of expenses
Bhosale advises people expecting or planning a child to take into account all expenses they would incur. This comprises prenatal care expenses including those for mother’s health and fitness, doctor fees, IVF expenses if required, maternity health insurance and maternity benefits programs. You must also account for maternity wear and if you intend to have rituals like a baby shower or Godh bharai, and photoshoots.
Further, Bhosale advises accounting for hospitalisation and delivery costs, as well as an emergency fund for medical issues that may arise. Early childcare expenses must also be taken into account.
How to financially prepare for pregnancy, childbirth and child care
Bhosale shares tips to financially prepare yourself for pregnancy, delivery and childcare.
Budget, save and invest
Assign figures to each expense and draw a budget accordingly. Save and invest accordingly, if possible at least a year before a planned pregnancy.
Identify your financial goals
Identify financial goals related to raising your child. Put the goals in different baskets like Short Term, Medium Term, and Long Term. For example, enrolling your child for a specific extracurricular activity could be a short-term goal, taking a long foreign vacation with your child could be a medium-term goal and higher education could be a long-term goal.
Make investment plans according to your risk appetite
Make investment plans and start investing for each goal. Your investments should be such as to provide for a smooth pregnancy and care to the baby. You can further extend it to providing a good lifestyle and education till the child reaches adulthood, even in your absence. Based on your budget, availability of funds and your financial goals, you can opt for monthly investments like Systematic Investment Plans (SIPs).
Create multiple funds
Categorise your investments into different funds like medical/health funds, post-natal care and childcare. You can continue working on building education funds, higher education funds, or even wedding funds if necessary. Set an emergency fund as well for unforeseen events.
Consider the loss of pay, if any
Take into account the loss of pay due to extended maternity leave or sabbatical and how it will impact your budget and finances.
Insurance
Include your child in your health insurance plans. Buy insurance plans for yourself. When your child financially depends on you, it is important to protect them in case of death. Make sure to add your child as a nominee to all investments made in your name.
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