Motherhood ahead? Plan for your child’s expenses and build a kitty for yourself

For most parents-to-be, personal lives take a backseat as soon as they realise a child is on the way.

Many start planning for the child’s initial expenses, primary education, and even higher education, immediately. Given the fees across streams and courses, this approach is prudent.

However, would-be mothers should also plan for their own personal needs. “Parenthood is a life-altering event. Even if it is not a planned pregnancy, you have nine months in hand to put a financial plan in place for yourself,” says financial planner Bhuwanaa Shreeram.

Make a list of expenses, budget for it

Needless to say, medical expenses will form a major part of your budget. Now, many employers’ group health and even personal health policies offer maternity covers. However, those covers come with waiting periods of up to four years, and hence will not necessarily be useful.

If you or your spouse are covered under employers’ group health covers, you can avail of the maternity cover benefit without the hassle of waiting periods. However, typically, both group and individual maternity covers come with sub-limits of up to Rs 35,000 for normal and Rs 50,000 for caesarean section deliveries.

Also, even if you can immediately file a claim under these policies, the benefit will be restricted to hospitalisation expenses. You will still need to factor in regular check-ups, medication, dietary changes, full-time support’s monthly salaries and so on.

In addition, there will be some discretionary spending, too.

“For many, childbirth (and the months leading to it) is a significant, emotional event. Even prior to that, people plan pregnancy shoots, lavish baby showers, prenatal sessions and so on. It is important to have a budget so that you do not go wild with spending on such events,” says Shreeram.

Also read: How expectant mums must plan their money matters

Create a corpus for yourself

Despite paid maternity leave, several women, at times, have to either extend the break even if they don’t get paid or take a sabbatical, say financial planners. “It is an emotional phase. Not every pregnancy is easy. Then, there are other factors such as childcare support. So, some do have to take a complete break. You have to plan for a buffer corpus that will last for at least two years,” says Prableen Bajpai, Founder, FinFix Research and Analytics.

The size of your contingency fund will also depend on your household responsibilities. “If you and your husband have taken joint loans, you will have to plan for your share of the EMIs. In some cases, the husband may not be able to completely absorb all the expenses. Even if he is doing well, a woman with an independent streak might want to continue paying her EMIs,” says Bajpai.

You can start setting aside a sum every month through recurring deposits or an SIP in debt mutual funds. “If you are not in a higher income slab, then even a fixed deposit will serve your purpose. Else, you can look at liquid or arbitrage funds for cost-effective returns.

Alternatively, if you have received a bonus, the lump sum can be parked in a liquid instrument as well. Besides health and other expenses, the kitty will also come in handy should you decide to choose a different field, a flexible remote option or part-time jobs. “Or, you might feel the need to upskill yourself during your break. You can use your fund for the purpose,” says Bajpai.

A financial cushion for a hassle-free future

The entire process can be overwhelming for young mothers-to-be. There are several uncertainties to be dealt with; let finances not be one of them. “It is a new experience, a time for a lot of joy. If you have your finances sorted, it can make this phase so much more beautiful. Proper planning will provide a financial cushion to the mother and give her freedom and time to think, take a step back or look for new roles and so on. And this freedom is priceless,” says Bajpai.

Getting started with financial planning – budgeting for your expenses and creating a buffer fund for personal growth – in the initial days can ensure that this important phase of your life is as blissful as it is supposed to be.