Davidoff coffee or Diapers?
IPhone or Infant Formula?
The Valentino or Disney themed Mittens?
Vacation or Vaccination?
Don’t all these questions play in our minds every time we sit down to think about planning a baby?
They say that while you should be “Physically & Emotionally” ready, you MUST be “Financially” prepared too.
So, how does one do that without being financially stressed?
Let me walk you through the various aspects that you need to plan and take care of before your bundle of joy arrives.
- Research the Costs: Being aware of the costs is extremely important. You shouldn’t be thrown off in surprise. Jot down all the areas that need financial attention – the doctor, tests, maternity clothing, hospital expenses, baby essentials, vaccinations, Japa costs, childcare facility, increase in food expenses due to added health consciousness, and the list goes on. Ask around, seek advice, research, and read books. Be Informed.
- Plan & Budget: We all know that raising a baby is an expensive affair and financially it might throw you off completely. Once you’ve decided to have a baby, Plan and Budget for the baby. Based on your research, you can determine a ballpark number associated with having a baby. You must be frugal and live on a post-birth budget in order to save all the money that you are going to need once the baby arrives.
- Create a Baby Fund: Create a specific Baby Fund to meet all those expenses that come with having a baby. You must start saving while you’re still in the planning stage or at the latest when you have that positive test before you. A Baby Fund should cover all your medical bills (pre-natal costs, costs of delivery, medical expenses relating to vaccinations and post birth doctor visits) along with baby essentials that you’ll need at birth. Ensure that you have funds ready for use when you hit the 30-week mark. Happiness might knock on your door earlier than planned.
- Build that Emergency Fund: The importance of a rainy-day fund cannot be stressed enough. Chances of unexpected medical costs or hospital visits are highly likely with a new-born baby or a toddler. You must save at least a 6-9 months’ worth of your monthly expenses to cover for unexpected costs. The last thing you want is to stress about the baby as well as the money. These funds also come in handy if you decide to quit your job and stay at home.
- Check your Insurance Cover: Read and Re-read the finer details. Get on a call with your agent and fully understand what you’re covered for, and how much you will have to pay. And if you don’t have an insurance yet, find an agent now. Check with your HR department about the costs that are taken care of by your employer. Maximize all these benefits that you most often tend to miss.
- Be Mindful during Baby Shopping and Don’t go Overboard: Yes, we all want to give the best of everything to our baby. But are we being mindless and spending 1,000s of rupees on things that we may not need? Babies outgrow their clothes and toys at lightning speed, it doesn’t make sense to overindulge in them. You have 9 months to prepare for the baby. Focus on getting the essentials, look for deals and offers, don’t be ashamed to borrow from friends and family, seek advice from people with experience.
- Create a Baby Registry: Friends and Family are going to buy you gifts, why not tell them what you want, to prevent wasteful spending and unnecessary gifts. This way you will get what you want without having to spend on them.
- Get a head start on college savings: You may think that college is a worry far away, but when you do the math the numbers might fluster you. And don’t forget to factor in inflation, your calculations will be completely off without that. Take advantage of the time on hand and start planning immediately. Review all the schemes provided by the government and see what suits you best.
While you need to take care of the above, one more essential that most of us miss out on is:
Creating a Work from Home Revenue Stream:
While most couples live alone by themselves and are working, chances are that you might have to quit work to take care of the baby. In that case, you’re going to stop having access to a major income stream. It is advisable to begin preparing a Work from Home revenue stream or a side hustle to support the increase in expenses and create a maternity cushion.
On that note, don’t be afraid to plan a baby just because you feel you are not financially ready. You may never actually be as prepared as you would like to be.
It is important to be mindful and take informed decisions.