Baby Planning has become very important in today’s time not only from an emotional but also from a financial point of view. There are many expenses associated with the arrival of a child – from pre-birth preparations to his education and marriage. Today we will specifically talk about financial expenses related to baby planning. This will be an estimated expense as it also depends on your need and desire. Let us first take a look at the expenses before pregnancy.
Pre-conception Expenses
The mother needs to be healthy for a healthy child. Many types of health tests have to be done before pregnancy and if there is any problem, then it has to be treated.
Medical tests and treatment
Pre-conception tests and if there is any health problem, then its treatment can cost from ₹ 50 thousand to ₹ 1 lakh. This expense depends on the hospital, doctor and necessary tests.
Delivery and the early years of the baby
There are many expenses associated with the birth of the baby and its early years, which need to be estimated correctly.
Normal delivery
A normal delivery can usually cost from ₹ 75,000 to ₹ 1 lakh.
C-Section
If a caesarean section is required, this expense can be ₹ 1 lakh or more.
Government vs Private Hospital
If pregnancy-related treatments and tests are done in a government hospital, then this expense is quite low. At the same time, this expense can also be less in nursing homes than in private hospitals.
Expenses till the child goes to school
The initial years till the child goes to school cost around ₹ 1 lakh or more. This includes infant milk, clothes, vaccines, basic checkups and other daily necessities. This expense can also change according to your need and choice. For example, the choice of diapers, formula milk, and baby-specific toys also impact the expenses.
Education Expenses
A child’s education is the foundation of his or her future, and it can also prove to be the biggest financial investment.
School Fees
Private Schools
Currently, the annual fees of private schools can be ₹1 lakh or more. It depends on the level of the school and the city.
Government Schools
Government schools have waived fees up to class 8, and charge very little for higher classes as well. Therefore, school-related expenses depend on personal choice.
College/Higher Education Fees
The fees of private colleges can range from ₹10 lakh to crores. It depends on the choice of course, college, and university. Professional courses like medical or engineering have much higher fees, while general undergraduate courses can have lower fees. If the child dreams of studying abroad, this expense can increase manifold.
Wedding Expenses
Finally, weddings are also a big and important occasion in Indian society, which requires adequate financial planning.
Wedding Ceremony Expenses
This expense depends on how you want to organize the wedding ceremony – lavish or simple. A normal wedding usually costs ₹5 lakh to ₹7 lakh. This expense depends on the wedding-related events, number of guests, location, and other arrangements. This amount can increase manifold in a lavish wedding.
How to fund these expenses
It is very important to make proper financial planning for such a big expense. Here are some ways you can raise these funds:
Investing in Mutual Funds
If one starts investing ₹5,000 every month right from the time of the child’s birth, then 20 years from today, at an assumed return of 12%, you can get ₹45,99,287 on maturity.
You can also increase the investment amount as your income increases through a Systematic Investment Plan (SIP), called ‘Step-up SIP’. This will help you fight inflation and build a bigger fund.
Emergency Fund and Health Insurance
Given the ever-increasing medical expenses, we should take health insurance premiums for all the family members. This will ensure your financial security during unexpected medical emergencies.
Along with this, a part of the salary should be saved for the emergency fund. This fund will help you deal with any financial issues you may face in the future, like job loss or any major unexpected event.