8 Financial steps to take before you have a child

From health insurance to stem cell cover, maternity benefits to will preparation, there are some important steps every to-be-parent must take before they have a child.


There’s no greater happiness in the world than the arrival of a new baby. From the moment the child is born, it is difficult for new parents to take their eyes off their little bundle of joy. But a child is also one of the biggest responsibilities the world has ever known. Financial planning for your child is a very important part of this responsibility. This financial planning is built upon certain crucial steps that you need to take before you have a child. We have therefore enlisted 8 financial steps that you must take before you have a child.
1) Get health insurance

There is nothing more important than the health of your new born, and to look after that, both the mother and father should be physically and mentally healthy. Since medical care is quite expensive these days, it is advisable to buy a health insurance policy before you have a baby (if you haven’t bought one already). Check which insurance policies cover maternity benefits. Though no company explicitly offers maternity insurance, certain companies provide benefits like consultation fee cover. Take a policy that covers your baby as well.

2)    Lifestyle changes

Middle Class and Upper Middle Class couples of today are used to living a more than modest lifestyle; but a baby’s entry into their lives changes a lot of things. Your disposable income decreases considerably, and you can no more expect to splurge on certain indulgences the way you did earlier. It is therefore, necessary to start making certain lifestyle changes to cut down on expenses. These expense cuts depend on the kind of lifestyle you live. For example, spending less on clothes and accessories, fewer dinners outdoors, less partying etc.

3) Review insurance

Before you have a baby, you must also review your existing life insurance policies and in case you don’t have a policy, you must buy one immediately. If you have already got a life insurance policy, then you have to check with your agency to ask if they would allow enhancing the cover. If they do not provide this facility, you should buy a new policy soon.

4) Check maternity benefits/ leave provided by the employer

If you are an expecting mother, you need to check your employers’ maternity leave policy and other maternity benefits provided by the company. Most companies offer paid maternity leave for 3 to 6 months. Some companies also offer unpaid sabbatical up to a certain period. You also need to start saving other leaves like sick leave, paid leave, etc. to use for your pre-natal checkups during pregnancy.

5) Stem cell cover

Stem cells can treat various illnesses and lifestyle diseases, and new parents are often encouraged by stem cell banks and doctors to preserve their children’s stem cells. Preserving stem cells becomes important if your family has a history of certain diseases, like Leukaemia. Once you decide to go for it, there are other decisions to make like choosing the right stem cell bank and arranging the money required to meet the cost of preserving the cells, and deciding whether you want to make a onetime payment or opt for monthly instalments. 

6) Devise a long-term investment strategy

Having a child is just the start of the biggest responsibility you could ever undertake. The one thing that will be your biggest concern apart from your child’s health is his or her education and career. You may not be unaware of the extremely high cost of education in the country, which includes quality primary education too. Before you have a child, you need to start finding ways to regularly invest small amounts that can be later used to fund your child’s education.

7) Start planning a will

Life is unpredictable and you would certainly not want your child to be left without someone to look after him or her if anything should happen to you. You need to start considering some of your close relatives for the role of the guardians of your child. You will also need to start deciding how your fund will be used to look after your child after you are gone. Creating a trust fund is one good option.

8) Decision to take a sabbatical

As a couple planning for a baby, decide whether you want one parent to take a sabbatical from work to dedicate all the time to the baby. If you take this step, decide which among the two of you would be the stay-at-home parent. Remember, this can make you both severely cash strapped, as this means you would have to survive on a single person’s salary, so think it through. If you decide not to quit, then start looking for a nanny/ day care for the child, unless you have a family member to look after your child in your absence. In both cases, you must start arranging the money needed to bear the cost of increased expenses.

Financial planning for your child does not have to be as daunting as it seems. With certain right steps (like the ones mentioned above), taken in time, it can happen very smoothly, thus, proving the adage- a stitch in time saves nine.


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