Get ready for regular medical tests, doctor’s consultations and quality care for the expectant mother. If the pregnancy has any complications, then expenses can multiply drastically.(Shutterstock image)
Get ready for regular medical tests, doctor’s consultations and quality care for the expectant mother. If the pregnancy has any complications, then expenses can multiply drastically.(Shutterstock image)

Welcoming a baby? It’s time to plan your finances!

Parenthood is a lot about taking on new roles and responsibilities. It also entails planning your financials properly so that your future is not shrouded with barrage of loans and depletion of savings.
UPDATED ON JAN 04, 2021 05:53 PM IST

Stepping into parenthood is such a wonderful journey that brings abundance of happiness into a couple’s life. As soon as a woman finds out that she is pregnant, the expecting parents start planning their onward journey- right from zeroing in on a good maternity hospital, great doctor and pregnancy-related tests to planning a great baby shower, maternity break, preparation for arrival, buying clothes for the little one to decorating and welcoming the new born either into a new house or prepping up a nursery; parenthood is a lot about taking on new roles and responsibilities.

Due to rising cost and improper financial planning for child’s future, 80% of parents have to pay for the education from their day to day income or general savings. Overall, lack of planning can impact the future through loans and depletion of savings.

Here is a checklist of all your expenses when you are expecting:

Pregnancy related costs: Get ready for regular medical tests, doctor’s consultations and quality care for the expectant mother. If the pregnancy has any complications, then expenses can multiply drastically.

Maternity leave and sabbatical: If the mother is working, you might have to take into consideration a longer maternity break (than paid for) or a sabbatical for a year or two. Factor in loss of pay if any due to maternity leave from work.

Prep for arrival: From buying clothes to setting up a nursery or even buying/renting a larger house - it needs a lot more than thought and budget allocation

Delivery and hospitalization: This surely will be the biggest chunk of your expenses. When you are pre-booking at the hospital for birth, parents should take expense estimates and keep aside the sum.

Pediatrician and vaccinations: The current situation has put a lot of emphasis on health and when it comes to your child, there is no way you would like to even take the slightest risk. The first 18 months will have frequent doctor visits and regular doses of expensive vaccines. Do plan for these expenses.

Plan for child’s education: Planning for child’s education should be started right at the birth. It creates discipline and gives more time for investments to grow.

Save and invest

IT employees Jayashree Ventat and Ventata Raman were initially in a dilemma, thinking how well they could manage their finances if they plan a baby, but they went ahead with the decision of embracing parenthood.

“We both are working and we realised we can manage the financial part with just some planning. Our first priority is now to save money and invest it in desirable instruments,” says Jayashree Venkat.

Take the SIP route

It’s not enough to just save money, one has to invest. Certified financial planner and practitioner Gaurav Mashruwala suggests investing via a Systematic Investment Plan (SIP). “One can consider having different SIPs, like one for education, another for health and medical needs, another one for retirement, one for marriage and so on,” he says, adding couples should not delay parenthood just because they feel they need to accumulate more finances.

SIP or systematic investment planning is a method through which you can invest in mutual funds through small and periodic installments. Tie your goal to one SIP and if it is education or medical requirement, let it be only for that purpose.

“Never ever use that SIP amount for other expenses. How much money one can invest in SIPs depends on factors like one’s monthly income, whether one is planning to buy a house, a car, and whether he/she has dependent parents and so on. So all these things should be considered,” says Mashruwala.

Future expenses and finance

A report by a popular MNC bank says that parents are going the extra mile to ensure their children have a good start in life. About 71% of parents start making plans for their child’s education and 60% start making funding decisions, before their child begins primary education.

The highest proportions of parents (96%) with at least one child in paid-for education are in India, the report adds.

This shows how much parents plan for a child’s future that includes education and insurance.

“We are aware that we need to spend a few lakhs for quality education. My husband and I have already decided our child’s school and the ways to invest money to get good returns. Since we both are earning, we know we could manage all expenses including health insurance for us,” says mom-to-be Sugirta Krishnamoorthy.

It’s not just a child’s education; parents also need to think about expenses for vaccination, other health expenses and daycare centres.

“Considering the present pandemic situation, we won’t prefer a daycare centre. Since my relatives are around, we don’t require a nanny too,” she adds.

If a couple doesn’t have any emergency fund till now, this is the time to set up one. If you have one, ensure it includes all childcare expenses, says investment advisor Satheesh Kannan.

This fund should cover six months to nine months worth of family expenses. “As your family relies more on your income now, ensure you have term insurance with sufficient coverage to meet your child’s future too. If the amount is not sufficient, you need to buy an additional term insurance policy. Similarly, buy a personal health insurance even if you have company’s health plan,” informs Kannan, the Bengaluru-based investment advisor at FinIntellect.

Also, couples need to figure out whether one of them will take a short career break, if so they need to work on the budget accordingly.

Parents need to save monthly to achieve their financial goals for children and invest systematically. Invest in a portfolio of equity and fixed income assets. Equity mutual fund is the better route as it gives wide diversification, suggest financial advisors.

Now, everybody takes a good selfie, and that can be used to achieve your financial goals. Mashruwala asks parents to take a selfie and on the picture one can write their financial goals like education, travel, health expenses and so on.

Key takeaways

•Set a goal and start an SIP according to your needs (For instance, if your salary is Rs 60,000, you can allocate money accordingly)

•Equity mutual fund is a great choice for investment as it offers wide diversification

•Remember to allocate money for pregnancy-related expenses and vaccination expenses for the newborn

•Ensure you have term insurance with sufficient coverage to meet your child’s future

This article is part of the HT Friday Finance series published in association with Aditya Birla Sun Life Mutual Fund

SHARE THIS ARTICLE ON
app
Close
India vaccinated 148,266 people on Monday, taking the total to 381,305. (Bloomberg)
India vaccinated 148,266 people on Monday, taking the total to 381,305. (Bloomberg)

Indian companies consider buying vaccines for employees

Reuters
PUBLISHED ON JAN 18, 2021 11:31 PM IST
Steel producer Jindal Steel and Power Ltd, autos-to technology conglomerate Mahindra Group and consumer goods giant ITC Ltd have begun initial checks on vaccines being available to buy after the government covers priority segments.
Close
FILE PHOTO: International Monetary Fund (IMF) Managing Director Kristalina Georgieva makes remarks during a closing news conference for the International Monetary Finance Committee (IMFC), during the IMF and World Bank's 2019 Annual Meetings of finance ministers and bank governors, in Washington, U.S., October 19, 2019. REUTERS/Mike Theiler/File Photo(REUTERS)
FILE PHOTO: International Monetary Fund (IMF) Managing Director Kristalina Georgieva makes remarks during a closing news conference for the International Monetary Finance Committee (IMFC), during the IMF and World Bank's 2019 Annual Meetings of finance ministers and bank governors, in Washington, U.S., October 19, 2019. REUTERS/Mike Theiler/File Photo(REUTERS)

IMF chief sees 'high degree of uncertainty' in global outlook

Reuters
PUBLISHED ON JAN 18, 2021 08:51 PM IST
IMF Managing Director Kristalina Georgieva said a new allocation of the IMF's own currency, Special Drawing Rights, would help give countries more fiscal space to tackle the health crisis and shift to a digital and green economy.
Close
Risks to the recovery could be in the form of additional regulatory measures, protracted restrictions on international travel and jump in the pandemic in new cases, said the report. (Representative Image)
Risks to the recovery could be in the form of additional regulatory measures, protracted restrictions on international travel and jump in the pandemic in new cases, said the report. (Representative Image)

Healthcare sector's revenue expected to grow 20% in 2021-22: Report

PTI
PUBLISHED ON JAN 18, 2021 07:58 PM IST
Domestic rating agency Icra has a stable outlook for the sector in the long-term outlook, given the swift rebound in occupancy as well as structural factors.
Close
After a decent show so far in 2020 despite the pandemic, the IPO market is awaiting a bumper crop with more than 30 IPOs worth over <span class='webrupee'>₹</span>30,000 crore lined up for the new year.(AP/ Representational)
After a decent show so far in 2020 despite the pandemic, the IPO market is awaiting a bumper crop with more than 30 IPOs worth over 30,000 crore lined up for the new year.(AP/ Representational)

IRFC IPO subscribed 65% on first day of offer

PTI
PUBLISHED ON JAN 18, 2021 07:58 PM IST
Price range for the offer, which is scheduled to close on Wednesday, has been fixed at 25-26 per share.
Close
The total amount released so far in 12 instalments is <span class='webrupee'>₹</span>72,000 crore at an average interest rate of 4.70 per cent.(PTI)
The total amount released so far in 12 instalments is 72,000 crore at an average interest rate of 4.70 per cent.(PTI)

GST compensation shortfall: FinMin releases installment of 6,000 cr to states

PTI, New Delhi
PUBLISHED ON JAN 18, 2021 07:00 PM IST
The Centre had set up a special borrowing window in October 2020 to meet the estimated shortfall of 1.10 lakh crore in revenue arising on account of implementation of Goods and Services Tax (GST).
Close
A visitor wearing a face mask to protect against the coronavirus walks among vehicles from Nissan at the Beijing International Automotive Exhibition in Beijing. China.(AP/ File)
A visitor wearing a face mask to protect against the coronavirus walks among vehicles from Nissan at the Beijing International Automotive Exhibition in Beijing. China.(AP/ File)

Nissan to promote Japan-based contract workers to full-time

Bloomberg
PUBLISHED ON JAN 18, 2021 05:34 PM IST
The hiring plan will “enable more efficient and effective business operations as well as improve individuals’ motivation and skills,” Azusa Momose, a spokeswoman for the company said.
Close
After eight years, the RBI under the current Governor Shaktikanta Das has been building up the foreign exchange (forex) reserve.(Mint file photo)
After eight years, the RBI under the current Governor Shaktikanta Das has been building up the foreign exchange (forex) reserve.(Mint file photo)

Forex intervention by RBI to touch USD 93 billion by March: Report

PTI, Mumbai
PUBLISHED ON JAN 18, 2021 05:13 PM IST
The report said they are more confident now that the RBI will continue to buy forex when the dollar is weakening.
Close
The United States put Huawei on a Commerce Department "entity list" in May 2019, restricting suppliers from selling US goods and technology to the company.(REUTERS)
The United States put Huawei on a Commerce Department "entity list" in May 2019, restricting suppliers from selling US goods and technology to the company.(REUTERS)

Trump admin slams China's Huawei, halting shipments from Intel, others: Report

Reuters
PUBLISHED ON JAN 18, 2021 04:38 PM IST
The United States put Huawei on a Commerce Department "entity list" in May 2019, restricting suppliers from selling US goods and technology to it.
Close
Foreign investors bought $2.4 billion worth of Indian stocks in the first two weeks of this month after investing the most since 2012 last year. (PTI PHOTO)
Foreign investors bought $2.4 billion worth of Indian stocks in the first two weeks of this month after investing the most since 2012 last year. (PTI PHOTO)

Sensex closes 470 points lower at 48,564 pts, Nifty ends session at 14,228 pts

Bloomberg
UPDATED ON JAN 18, 2021 04:20 PM IST
India’s equity benchmark fell in line with its regional peers on Monday, extending Friday’s decline. The drop moved the S&P BSE Sensex further away from the key 50,000 level it was looking to breach last week.
Close
The Nifty Metal Index was the worst performing index, falling 4.1% to its lowest since Jan 4.(AP)
The Nifty Metal Index was the worst performing index, falling 4.1% to its lowest since Jan 4.(AP)

Shares hit over 1-week low as shadow lenders drop on fears of tighter rules

Reuters, Bengaluru
PUBLISHED ON JAN 18, 2021 04:08 PM IST
The blue-chip NSE Nifty 50 index fell 1.06% to close at 14,281.3, while the benchmark S&P BSE Sensex was down 0.96% at 48,564.27.
Close
The investment strategy for the new fund will be the same as in the first fund, it said, adding that the investments will be made in three identified themes.(Reuters | Representational image)
The investment strategy for the new fund will be the same as in the first fund, it said, adding that the investments will be made in three identified themes.(Reuters | Representational image)

Tata Capital PE fund raises 1,250 cr to invest in urbanisation, manufacturing

PTI
PUBLISHED ON JAN 18, 2021 03:58 PM IST
The fund has both newer and existing investors, which include global and European fund of funds, Japanese institutions and a leading Asian development finance institution, a statement said.
Close
Mizoram’s first solar power plant has been commissioned at Tlungvel.(Reuters/ Representational photo)
Mizoram’s first solar power plant has been commissioned at Tlungvel.(Reuters/ Representational photo)

Total speeds up renewables push with $2.5 bln investment in Indian solar power

Reuters
PUBLISHED ON JAN 18, 2021 03:44 PM IST
For its investment, Total will get a 20% stake in AGEL and a seat on its board, as well as a 50% share in the Indian firm's portfolio of solar power assets, the French firm said.
Close
IRFC IPO comprises up to 178.20 crore shares, comprising a fresh issue of up to 118.80 crore and offer-for-sale of up to 59.40 crore shares by the government.(iStock)
IRFC IPO comprises up to 178.20 crore shares, comprising a fresh issue of up to 118.80 crore and offer-for-sale of up to 59.40 crore shares by the government.(iStock)

IRFC IPO opens for subscription; wise decision to invest, say experts

By hindustantimes.com | Edited by Shivani
PUBLISHED ON JAN 18, 2021 11:16 AM IST
As per experts, it will be a wise decision to invest in the IRFC IPO due to the strategic role of the Indian railways in financing growth. It also has a low-risk business model and lower credit risk.
Close
The S&amp;P BSE Sensex slid 0.3% to 48,878.1 as of 9:50 a.m. in Mumbai, with three stocks falling for each one that rose.(HT photo)
The S&P BSE Sensex slid 0.3% to 48,878.1 as of 9:50 a.m. in Mumbai, with three stocks falling for each one that rose.(HT photo)

Indian stocks drop for a second day, tracking losses in Asia

Bloomberg
PUBLISHED ON JAN 18, 2021 11:01 AM IST
Foreign investors have bought $2.4 billion worth of Indian stocks this month through Jan 14.
Close
The cryptocurrency could be hurt by an exodus of trend-following investors unless it can “break out” above $40,000 soon.(Reuters)
The cryptocurrency could be hurt by an exodus of trend-following investors unless it can “break out” above $40,000 soon.(Reuters)

Bitcoin retreats from $40,000 level strategists view as key

Bloomberg
PUBLISHED ON JAN 18, 2021 10:27 AM IST
Traders seeking clues about investor appetite for risk have been gripped by Bitcoin’s stunning rally and turbulent 12% slide.
Close
SHARE
Story Saved
OPEN APP