Your party of two is about to become three.
Could there be a more joyous time for parents-to-be?
But before you get ready to welcome a new member into the fam-jam, consider making a fin-plan!
Don’t let financial distress burst your bubble of happiness.
In this blog, Greendigo experts break down the average cost of raising a child in India (up to 3 years of age).
We’ve also provided some helpful tips to get you started on the journey of parenthood.
The Cost of Care
Having a baby is as much a financial investment as it is an emotional one.
Don’t worry, though, you don’t have to do any number crunching.
We’re here to provide you with a basic outline of expenses.
The first category to account for is medical. This covers pre and post-delivery hospitalisation bills, regular and C-section deliveries, outlays pertaining to medical treatment of the newborn (normal or premature baby), vaccinations, wellness checks up, and more.
Next, baby supplies. Now, this includes one-time purchases, as well as everyday buys. The former comprises of products like a crib, car seat, high chair, stroller and nursery essentials. The latter consists of diapers, wipes, organic baby clothing, toys, baby formula, etc.
Number three, of course, is schooling. Yes, most preschools accept children who are between 2 and 3 years old. The question is – will your child be ready? If yes, this is a major expense.
Apart from the above listed categories, there can also be a host of ad hoc expenses.
We’ve have estimated that the cost of raising a child in India (for the first three years) is anywhere between Rs. 5 lakhs to Rs. 6.5 lakhs.
Please note, this will vary depending upon the city and suburb you reside in.
The important thing to remember is that the expenses for the first few years should be planned for.
A Financial Planning Checklist
Here is Greendigo’s 7-criteria checklist for budding parents.
Try and incorporate some of these into your financial planning process, so that you’re taking active steps to make room for the newest entrant.
- Review your short term and long-term expenses.
- Create a smart savings plan (for e.g., 20% of your income), taking into account variable and fixed expenses.
- Build a monthly budget, and set aside emergency funds.
- Clear your credit card bills and all other pending debts.
- Update your insurance plans – life and health.
- Get your will in order.
- Understand your company policy, with respect to maternity and paternity leave.
Parenthood is both, a rewarding and challenging journey.
Having a baby can create expenses that are sometimes not part of Plan A.
And this is where the right financial plan makes all the difference.
The key to living a stress-free life is to making decisions that are sustainable.
So, make sure to anticipate your needs and acknowledge where you are heading.
This will not only reduce financial inconveniences, but help with any unnecessary surprises along the way.
Additionally, don’t be afraid to ask for help!
Congratulations, and good luck, from Team Greendigo.