Pre-delivery expenses

Pre-delivery planning involves not just saving for the monthly checkups and expenses leading up to the delivery but making a transition from double income to single income in the household, especially if the mother chooses to quit employment. The plan will also be applicable in the initial months of motherhood.

Apart from that, medical checkups and hospitalization may not be well covered by your health insurance plans and you could end up spending your liquid cash to meet the expenses. You should also to be prepared for unexpected health conditions during pregnancy.

It will, therefore, seem practical to set aside a small amount every month (you could consider recurring deposits) aside before you plan to have a baby.

Post delivery expenses

Post delivery expenses include vaccination and health procedures for the mother and the child. For this, one can look at group health cover provided by their employer, that covers hospitalization for delivery and critical care.

Apart from healthcare, you will have new expenses like baby food, clothes, furniture, diapers, etc that will add to your monthly living expenses for 3-4 years of the child's growth.

Monthly budgets

After the arrival of the child, your lifestyle will change within the first year itself with products needed to nurture the baby. You may also feel the need to indulge in expensive childcare products because of the emotional quotient of wanting to give your child the best you can.

While some things cannot be avoided, you can give up splurging on products like baby car seats, baby shoes, excessive baby clothes, etc, that basically only provide aesthetic value. The money you plan to spend on them can easily be put aside in an equity mutual fund exclusively for your child's future.

Life insurance and will

Sometimes unforeseen circumstances take place and you should be prepared to not leave your child exposed to such risk. Apart from making mutual fund and other investments for your child's future, you should include him/her as the nominee of your personal investments including life insurance.

Additionally, it is a good idea to make a will so that your assets are passed on to the child and he/she is appointed a guardian that you can trust.

Celebrations, education and marriage

Birthday parties and traditional ceremonies of the child will be the short-term expected investments that you can set aside through FDs, RDs or short-term funds.

Higher education and wedding you can certainly plan for with separate long-term investment plans like diversified equity funds and gold schemes.

Emergency fund

An emergency fund is not just needed for your child but for unforeseen circumstances like losing your job. In such cases, you should have at least 6 months worth to be able to last through the period without having to break fixed investments or risking basic necessities like school fees.