Can You Afford a Baby?

It is very typical in our society. You have been married recently and soon parents, relatives, friends and neighbours start asking you when are you going to be a parent! Parenthood is a big step. There will be many changes in your life from various perspectives. People might say you are being too objective but you MUST consider your finances before you decide to become parents because one might not be aware of costs of birthing, parenting etc.

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Can You Afford a Baby?

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Steps to prepare you financially for parenthood

Save, Save, Save

You have to start saving more each month as there will be a new member in the family and it is your responsibility to provide for the child. There will be many expenses like doctor’s visits, vaccinations etc. with a newborn child and you need to have money for it. You will have enough time to save up a substantial amount if you start now.

Calculate the cost of having a baby and being parents in the first year

Having a baby requires lot of financing. Before the delivery, there will be costs related to the pregnancy, which means regular check ups, medicines and medical tests. The actual delivery and hospital expenses are to be taken care of. Once the baby is home, there will be costs like clothes, medicines etc. There are tools online that help you calculate the cost for 1 year. You can check with friends who have become parents recently or even ask the doctor.

Inculcate better money habits

It is important to start practicing good money management habits if you are not already doing that.

  • Ensure that you do not get trapped in too much debt. Try to repay some of the costly loans like personal loans.
  • Build an emergency fund worth 3-6 months expenses so that after the baby comes, if there is an unexpected emergency as well, you are in a position to mange finances.
  • Create a budget by dividing expenses like fixed expenses (rent, regular expenses), variable expenses (grocery, petrol) and discretionary spending (movies, holidays etc.). Then track your expenses and try to live within the budget.
  • Keep a check on unnecessary expenditure and make an effort to reduce them.

Plan Ahead

You need to plan certain things. You need to think through certain matters before the baby comes into your life as at that time the baby will be the most important priority for you and you will not be able to think about other things

  1. Live on 1 salary – If both the spouses are working, when the baby is born, one parent will have to temporarily stop working. This is a major financial consideration. Sometimes it will take long to resume work, which means you will have to manage on 1 income. You have to plan on how you will manage.
  2. Check Insurance coverage – Have you taken insurance? Check your insurance coverage and see if it will take care of the additional family member else opt for higher coverage or a family floater.
  3. Leave policy of the company – Look at the leave policy of the company that work in on paid maternity and paternity leaves. Check the company’s stance on additional leave required. Most companies cover medical expenses for 2 children. Check the procedures and terms and conditions regarding the same so that you are not in for any major surprise.
  4. Take care of health – Both parents should take care of their health. It is important that both are fit and do not have health problems. This will lead to physical and financial difficulties.

Do not go overboard purchasing baby stuff

The shops will have lots of nice things to buy and it will be easy to go overboard and buy cute toys, clothes and things. But you have to hold on. A small baby does not need too many things but more of your attention and love and he/she will soon outgrow things. As the child grows bigger, there will be many opportunities to buy stuff and you can indulge in your child a bit by bit.

Make a will

It is important to make a will and make sure it is clear as to who will get what of your assets and liabilities in case of any unfortunate event. The baby needs financial protection for future and you should ensure that you give him/her that.

Complete Guide – Child Future Plan

Have you thought of the financial factors to consider before taking the step towards parenthood? Let us know what kind of preparation from a financial perspective have you done.


  1. That’s a nice article, but I believe if one have to do this much of calculation to become parent, then the future days will not be good. I agree that a proper finance habit has to be there, but attaching the term “afford” with a baby is not look good.
    Every parent can afford a baby irrespective of their earning capacity. 🙂
    But you are also true, as many of my friends are delaying this topic as they feel they are not ready to become parent(with earning capacity of more than 1.5 lak/month) , although they are crossing 32+ age.

    • You are correct in your perspective . But for well being & future of a child;financial planning is essential.We will be doing injustice to child if we cannot provide for its needs. There is no denying that it is a competitive world. Do we want our child to be denied the amenities because of our lack of foresight ?

      • Hi Rajiv,

        Every parent is providing the amenities to their child as per their financial capabilities. What I want to say is creating huge pressure of earning by setting up some high profile ambition for kids these days without actually knowing what is this kid is capable to do.

        E.g. These days people are taking too much stress to put their child in one of the best schools from nursery only, even if it cost them more than 3 lakh. I know peer pressure and the competition play a big role here. But to fund his/her education expenses, each parents have to work day & night.

        Definitely financial planning should be the first criteria to make life relax. But everyone have to take step as per
        their capabilities only. Only a best school, best college or best degree can’t produce a good human.

        Parents are putting their own expectation on kids, trying to fulfill their own dreams though the kids. How many parent really follow the heart and provide a career path where he/she is really interested?

        I think for them, this article is perfectly suited. Because here I believe we can put our life to meet his/her dream career. 🙂

        • I agree. As more and more women are taking up careers there is a tendency to delay marriage. Then after getting married they are not prepared to have kids. There is a right time for everything. If even middle-aged couples can not afford to have kids then who can afford to have them.

          • Hi Anil,

            I think you are taking this discussion in a different direction, as I don’t agree your first line.
            How working women are responsible for delaying marriage? Do you know how many % of such women exists in our country?
            It’s the men who are not ready to get married early as they are not able to make enough money, house, car and so called settled down etc.

            • I have three IT professional girls in my extended family. They got married in their mid 30s and are making more money than their husbands. Two of them have decided not to have kids in the near future. The third one wants to have a kid but can not have inspite of spending huge amount on medical treatment.

  2. Well researched article. All the above points are essential for the well being of child. Especially to keep in mind the cost of higher education.

  3. I guess time has changed now..everyone has a plan for future and babies are critical part of it. Cost of education is key parameter of the plan

  4. thank u so much for bringing this up for i am sure, finance becomes “the thing” that pops up when one things of parenthood, infact many shy away from pregnancy considering the huge finance involved especially when only member is earning. All i would like to advice the young couple, especially the ones who are recently married, and living on their own in a new city, without in laws,postponing pregnancy to enjoy this life in the company of one another, friends….definitely go ahead enjoy this hassle free life…but do keep a contentious effort to save simultaneously, it will reduce the financial burden to a great extent. Enjoy but responsibly!!!

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