According to the U.S. Department of Agriculture, an average middle-income couple spends $233,610 – excluding childbirth and college costs – till the age of 17 on their kid with some of the biggest expenses spanning childcare, healthcare, and education. Baby budgeting, then, is an important aspect to consider before having kids and if you haven’t started doing it already, these 11 steps will help you plan your next few months meticulously.

1. Draft a pre-baby budget

There is a lot that you need to buy before the arrival of your baby. High-end stroller, crib, toys, cradle, bassinet, baby monitor, diaper changing table – the list keeps growing. Set a limit on the spending and divide the spending equally among all the months. Check out the 50/30/20 budget calculator – this will help split the savings amount perfectly. Just feed in your current budget breakdown, spending baseline, and you will be able to see your monthly progress.

2. Plan your maternity/paternity leave

Check with your company’s policies and make a note of how much money you and your partner will make when you are off work. Plan those months accordingly and save in advance if the finance might affect the daily household budget. Every company generally offers 26 weeks of ordinary maternity leave in addition to 26 weeks of additional maternity leave. Staff Squared is an amazing way to calculate key dates and also streamlines the HR processes.

3. Cut down on debit and credit cards

You need to indulge in responsible spending. Make sure you cut down on unnecessary spending from your cards. One of the best ways to reduce using cards is by spending with cash. Withdraw a lump sump amount at the beginning of the month, taking into account planned expenses, and don’t use the card.

4. Create an emergency fund

Besides just cutting down on the expenditure via cards, also save money for the next few months. You have several emergency fund calculators that are available online. Besides, you can also download the RC Money Finder – this will help you find more money each month. It will give you tips on places where you can find money as part of your budget and spending. This exercise takes place on a monthly basis and an average person has found $2,000 for the year.

5. Review your insurance

Now that your family is growing you need to make sure you review your life insurance. If you need to renew the insurance and re-calculate it, this is the perfect time to do so. Take some time with your insurance company and understand how it works, the different types of insurances (term life or permanent life), how much life insurance to buy, why both parents need life insurance, who will the beneficiaries be, how the life insurance is priced and premium, etc.

6. Renew your health plan

Add your baby to your insurance plan within 30 days of your baby’s birth. Finish as much paperwork as you can after the baby arrives. This will help you from last-minute running around and the process in itself will be smooth.

7. Draft a post-baby budget plan

Some expenses will recur every month, set aside some funds just for that. It might sound scary but all it needs is a little planning. An easy and effective way to create a budget is by creating an account in You Need A Budget – a guide that will help you create an effective budget that is user-friendly and has helped you stick to your plan. Every month, you will begin spending on daycare centers, diapers, household expenses might increase and baby food as well. Set aside some funds just for this.

8. Choose a pediatrician

You need a doctor for your baby for the next few years. Choosing a good pediatrician is of utmost importance. Check with your friends and family and make an informed decision. While meeting doctors and calling up clinics, also make sure that the doctor will be covered under your insurance.

9. Save for their education

This one is a long term plan but starting early is always a good idea. College is expensive, start planning for it early so you can help your child with finances when they need them.

10. Prepare your will

This might seem bizarre but being prepared is always better than being sorry. Prepare a will and clearly mention all that your child will inherit. Take advice from your lawyer and get this out of the way. This might not be the most important task but it cannot be ignored. The will makes your child’s future safe and at the same time, it gives you a sense of peace.

11. Keep saving for your retirement

Your retirement funding is a long-term, never-ending plan. While you are managing all your finances meticulously for your new child, don’t forget about your retirement. You might not be able to allocate funds for this immediately with all the other expenses, emergency funding, and your child’s future savings but resume saving for this and do what little you can.

While all these pointers and tips might seem a little overwhelming, one must remember the combined income one draws and customize the above steps accordingly. The idea is to stay prepared at all circumstances and to make sure your family and your new baby have a comfortable life. Happy planning for that little bundle of joy coming your way!

  • Mrinalini Sundar

    Mrinalini Sundar is a lifestyle journalist with eight years of experience and has worked with renowned publications like Times Of India and The New Indian Express. She is currently freelancing for South Asian Magazines in Toronto and is a digital marketing professional. Mrinalini is a big movie buff and has interviewed the likes of Shah Rukh Khan, Deepika Padukone, Alia Bhatt, Irrfan Khan and AR Rahman.