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Step 1: Understanding the costs (beyond just diapers)

Most people think of baby expenses as one-off things like cribs, toys, and formula. But it’s the ongoing stuff that adds up fast.

In the first year alone, you’re looking at:

• Maternity and delivery costs
• Baby gear - stroller, crib and feeding essentials
• Medical checkups and vaccinations
• Diapers, wipes, formula
• A possible drop in income if one parent takes time off

That’s just year one. By the time they hit playschool, daycare, and education start adding up too. So, the first money tips before having children? Be prepared.

Step 2: Emergency fund = non-negotiable

Before this, our emergency fund covered about 3 months of basic expenses, including rent, groceries, and bills. That felt fine when it was just the two of us. But with a baby in the picture, the goalpost moved.

Now, we’re aiming for 6 months of expanded expenses. That includes not just our regular costs, but also new ones like medical bills, baby supplies, and the possibility of one income going on pause during parental leave.

Basically, the math changed. More unpredictability and more reasons to have a serious cushion.

We’re building it slowly, through a monthly SIP into a Liquid Fund. I treat it like a non-negotiable bill, just like rent or groceries. Because if something unexpected happens, I want finances to be the last thing we’re worrying about.

Step 3: Review health insurance for you and your baby

Here’s something I almost missed: maternity expenses aren’t automatically covered in regular health insurance. You need a plan that includes maternity, and most of those come with a waiting period (anywhere from 9 months to 3 years).

We upgraded to a policy with maternity and newborn care built in. (Pro tip: the earlier you get it, the better, because of waiting periods.) Also, check if your plan lets you add your baby right after birth; some do it automatically for the first 30 days, others require paperwork. Do not leave this to post-delivery brain fog.

Step 4: Revisit Life Insurance

Before this, we had basic term plans just to cover liabilities like a home loan. But a baby? That’s a whole new level of responsibility.

We recalculated our Term Insurance based on our expected expenses, future goals (like education), and existing investments. Then bumped up our coverage. No fancy add-ons, just pure Term Insurance that ensures financial safety.

If you’re wondering how much cover you need, a good starting point is: annual expenses × 15 + liabilities – existing investments.

Step 5: Monthly budget makeover

Let’s be real - kids change your spending habits. Weekend brunches and impulse shopping take a backseat when you’re saving for baby wipes in bulk.

So, we started tracking expenses more seriously. We divided our budget into:

• Essentials (rent, groceries, EMIs)
• Baby prep fund
• Emergency savings
• Lifestyle (entertainment, eating out)

It’s not about cutting joy. It’s about spending consciously so you can afford both that adorable onesie and your peace of mind.

Step 6: Plan for education early

We’re not planning premium colleges just yet. But school fees are no joke, even for preschool. We started a Mutual Fund SIP, earmarked solely for future education expenses. It’s small for now (₹3,000 a month), but that compounding will kick in soon enough.

This kind of goal-based saving is a huge part of financial planning for having a baby, and the earlier you start, the less you feel the pinch later.

Step 7: Talk money with your partner

This one’s underrated. We’ve had more money conversations in the past 6 months than in the past 6 years.

We discussed:

• Who’s handling which expenses?
• How we’ll split childcare time vs. work.
• Whether we need to change investments or career plans.

Even things like childcare help, moving closer to family, or switching to part-time work became part of the discussion.

Because it is necessary to be make intentional choices as a team and maintain finanances efficiently.

Raising kids can be expensive, but smart planning helps

Building a plan, asking the uncomfortable questions, and saving bit by bit has already given me a sense of calm. Not everything will go according to plan, but at least we won’t be caught off guard every time.

If you’re even thinking of starting a family in the next couple of years, start your financial prep now. Because trust me, when that baby arrives, you should be able to focus on the joy they bring, minus the financial stress.

Disclaimer: This article is intended solely for informational purposes. The views expressed in this article are personal. Axis Bank and/or the author shall not be liable for any direct or indirect loss or liability incurred by the reader arising from reliance on the content herein. Readers are advised to consult a qualified financial advisor before making any financial decisions. Axis Bank does not endorse or guarantee the accuracy of any third-party content or links included in this article.

By Axis Bank Learning Hub Team