Parenthood can be one of the most rewarding and life-affirming experiences. However, preparing for the arrival of a new member of the family isn’t only about dreamy baby showers and heartwarming ultrasound sessions; it also heralds a new chapter in your financial planning. The responsibility of nurturing another human being requires an extensive prepping up of your finances because becoming a parent is nowhere comparable to any other financial goals that you may have had. If you are about to embark on this rollercoaster ride or have recently welcomed a cherub into your family, your financial planning will have to encompass a wide range of factors.

Medical expenses start before delivery

While some parenting skills – like changing diapers in the least messy way – can only be acquired once your child is born, you cannot leave the task of preparing your finances for parenthood for later. Right from conception till delivery, you may have significant medical bills to take care of – be it routine check ups, prenatal care or delivery charges and in the absence of a solid plan, you may find yourself getting overwhelmed even before your baby has arrived. Roshni Chawla (name changed), a Mumbai-based dentist, who is expecting her second child says, “My first pregnancy was quite tough and I had to quit my job unexpectedly. The medical complications left us financially drained and what with the sudden loss of income, it made things incredibly stressful. While we had left no stone unturned to be financially prepared for this life event, we hadn’t envisaged that I would be left with no job way before my child was born. This time we are better prepared and have prioritized having liquid assets so we have some breathing room even if our expenses shoot up unexpectedly.”

Preparing for your baby’s arrival

Preparing a shopping list for your bundle of joy can be exhilarating but it also needs careful planning. Strollers, bassinets, diaper bags, changing tables, cribs, feeding bottles – the list can be endless. Distinguish between necessary and optional purchase can prevent wastage of financial resources. Chawla says, “When I conceived the first time, my husband and I were very excited but before long we got mired in hospital visits. The ensuing troubles pushed us to be very mindful with our baby-related purchases before my delivery. I spoke to a few women who had recently given birth and it helped me avoid many unnecessary emotional purchases which I would have made otherwise. Also peer pressure among new mothers is very real but skipping buying that extra designer onesie and saving that money is the way to go. ”

Planning your maternity/paternity leaves

Juggling motherhood and career can be a herculean task and there is no-one-size fits all formula. According to an ASSOCHAM survey, about 40 percent of working mothers want to quit their jobs to raise their kids. While some women are able to kick start their careers sooner than others after a maternity break, stipulating a timeline can he hard. It is imperative to be prepared for a situation where you may have to take a professional break longer than you anticipated and the corresponding income disruption. Nishi Malhotra, a Delhi-based software engineer who has a one-year-old daughter says, “When my husband and I started having discussions on having a child, we also looked at the specifics of the maternal and paternal leave policies of our respective employers. That gave us an idea of how we would manage our finances in case I had to take a longer career break. I had to extend my maternity break and that caused my income to be disrupted for a while but since we had planned beforehand, it didn’t cause a significant dent in our financial situation.”

Post-pregnancy money management

Entering parenthood is a life-changing experience and for new parents, decoding baby expenses while getting used to the childcare grind can be a daunting task. Besides recurring costs like baby food, regular check-ups and a constant need to buy new clothes as your little one keeps growing, another major overhead expense in today’s time is childcare facilities. As the joint family system gets eschewed and nuclear structures become the norm, for many working couples finding a reliable daycare facility or babysitter that suits their budget can be tricky. Varsha Sharan, a management professional at an MNC who has two children aged six and three says, “With my first child, I was fortunate to have my in-laws and my parents around who pitched in to take care of my baby when I rejoined work. But things were different when I was expecting my second child as we were living abroad. My husband and I knew childcare would be a major expense and so we planned things in a way that we were completely debt-free before she was born. That helped us comfortably navigate the expenses incurred on a babysitter.”

The bigger picture

It is no fun talking about tragedies but now that you have a human to take care of for many years to come, you cannot risk being unprepared for any emergencies that may arise. Ensuring adequate insurance coverage for your child can go a long way in providing security to your children. With the HDFC Life Sanchay Plus Plan you can safeguard your child’s future against any untoward situations that may arise in the future. Sanchay Plus is a non-participating non-linked, savings insurance plan that offers guaranteed returns so that your family can fulfill its dreams and also be equipped to deal with any unexpected liabilities. The payouts are guaranteed as lump sum or regular income and are not exposed to any market risks. What’s more, you can avail tax benefits and you also have the flexibility to choose between Life Long Income Option and the Long Term Income Option – the first ensures guaranteed income till the age of 99 years and the second for a fixed term of 25 to 30 years.

Personal finance assumes a whole new dimension when embarking on the road to parenthood. Making the right decisions can make the experience all the more fulfilling because there are few things that can match the joy of watching your child grow into a well-rounded human being.