Diapers to day care: Is your family growing bigger? Here's how you can manage your expenses.

A child brings joy and happiness into a household. When a mother holds her baby for the first time, and the first time the father picks him/herI up in his arms, there is no feeling in the world that may ever be comparable. However, it is not the easiest job in the world.

Just a few days after a child is born the parents are presented with a hospital bill and then they often realise they have underestimated the cost or not allocated enough funds for the same. Estimating the costs that one may have to incur is not easy. There are myriad contingencies involved and it is nearly impossible to foresee each and every one of them. But there are a few things that one can do to minimise the uncertainties that come along with this beautiful journey.

• Plan out what your expenses will be : 

  • Of course one can’t predict all the expenses that they will have over time, however, one can assume what some of the costs they will incur for sure. These could be the maternity/labour costs, the nanny’s salary, vaccination fees, doctor fees, day care fees and more. While the actual cost of it may vary on various factors, such as metro city v/s suburbs, the type of hospital they choose to visit (a multi-speciality hospital is bound to cost more than a clinic), parents can have a vague idea of what the costs may be. This will help allocate funds in the right channels for the period of time required.

  Invest wisely :

  • Pre-school expenses and education expenses will not be incurred for the first 4 years of a child’s life. Hence, one can invest in funds that are not very liquid, which they can withdraw after 4 or more years (as necessary). Other day to day expenses of a child is going to be more recurring expenses. Hence, one may want to keep aside a certain amount of money for these, in particular. Saving in a unit linked insurance plan (ULIP) such as what Aviva insurance offers, can be wise, especially for the child’s education. They offer many schemes and one can choose what they would prefer investing in.

  Keep a contingency fund :

  • While one may plan for many contingencies, there is bound to be an expense that crops up that was not planned for at all. No matter how meticulously one has planned. This fund will help meet all those expenses. This must be a fund that is apart from the one created for medical emergencies. Treat this fund like one of those piggy banks that you had to break to open it. Unless there is a dire need for it, don’t touch it.

  Keep inflation in mind :

  • And not just monetary inflation; one must think of medical inflation rates, education inflation and more. With the rate at which the prices for almost everything is skyrocketing, it is important to foresee what other expenses one may incur.

The journey of raising a child is beautiful, and almost sacred. Something as mundane as money must not ruin the experience. Planning and investing wisely will surely go a long way.

Related Articles on Saving Schemes:

• https://www.avivaindia.com/insurance-guide/monthly-income-scheme-options-2022
• https://www.avivaindia.com/insurance-guide/reasons-why-you-should-invest-ulips
• https://www.avivaindia.com/insurance-guide/can-my-savings-plan-keep-me-afloat-uncertain-times
• https://www.avivaindia.com/insurance-guide/savings-plans-and-life-goals-how-saving-early-can-help-me-during-important-lif

AN Oct 3/22​

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