To say that life changes radically after the arrival of a baby is an understatement. The surge in joy is in tandem with the spike in expenses, the physical and emotional turmoil at par with the financial stress.While one takes several measures to stabilise the body and mind, surprisingly very little financial preparation is undertaken to deal with the new development.If you’ve started planning as a couple, early on, you have already accounted for this phase and the financial responsibilities it brings. 

It’s not easy to go from a dual earning family to one head earning for six or more months/2-3  years. The bills going forward are only going to pile up more. As an expectant mother, if you’ve not planned for childbirth and are looking to budget and plan for a sabbatical, follow these steps to transit this phase. From shortfall to unexpected expenses, here’s how you should save, plan and spend, all while taking a sabbatical. Want to plan a sabbatical after childbirth? Want to navigate this exciting and expensive phase without financial worries? Don’t know where to start? Read on to find out. 

To start with, you need to plan for your finances when you are planning to have a baby on pre-delivery and post delivery expenses and the Sabbatical. So accordingly, 

1.Prepare for a single income household pre delivery

 If you are working and decide to quit for a considerable period of time and planning on taking a sabbatical post childbirth, your budget will take a sharp hit. If you plan a baby when you are already paying a big home loan EMI and the woman is set to quit work, the financial stress levels can zoom. It would be so much easier to enjoy the process of having and raising a child if it were not marred by financial concerns or constraints. Ideally, the saving and investing should begin the moment you plan a baby, splitting it into two buckets–pre-delivery and post-delivery. The former not only includes saving for medical expenses leading up to the delivery, but also planning for leave if you are working, making the transition from a double to single income household, preparing for the rise in expenses after the baby, and saving for short-term goals that spring up in the first 3-4 years.

2. Build an emergency corpus

 This is a crucial buffer you should have for any medical or non-medical emergency that may crop up before or after delivery. The amount should be equal to at least six months of your household expenses, and should be in addition to the medical corpus you build for pre-delivery check-ups and hospitalisation. This can also serve as a buffer for the financial constraints you may face after the baby arrives.

3. Take stock of fixed, variable and recurring expenses 

Decide on your sabbatical term. Foresightedly analyze for how long you’d like to take a break. What are the expenses that need to be met in this time span? With the household short of one income head, expenses on the rise, you need to detail each and every kind of expense you are expecting in the months to come. From pregnancy tests, delivery costs, prenatal and postnatal care to the cost of hiring an extra helping hand to manage all the extra chores. New purchase expenses such as babies’ toys, books, bedding, diapers and the list goes on. 

4.  Plan for Short-term and long-term child care goals

From vaccination charges to mother-toddler programs in the near future building on your child’s financial security right from the go is important. You need to consider the cost of a growing family in your long term goals and just like you start planning your child’s education early on, you also need to start prepping a financial plan for all your needs. 

5. Update your insurance 

Considering the high charges for medical tests and hospitalisation, and poor maternity benefits in health plans, it would be prudent to put away a small amount every month in a liquid fund  right after you decide to have the baby. If not, you will either have to dip into your savings or cash flow, unless you are covered by your employer or the government. As soon as your child turns 90 days old, you should register the child for the family health insurance plan. Simultaneously you should also purchase a health insurance coverage for your newborn. Make sure you and your family are adequately covered for critical illnesses and any untoward occurrences. 

6. Prep your estate plan

A sabbatical that revolves around a newborn is equal parts tiring as it is rewarding. You can take this time to start working on your estate plan. If you’re unsure how to go about it, hire an expert to guide you and take the hassle out of this vital task for you. Don’t want in anticipation of tomorrow to do what needs to be done today. Secure your child’s legacy at the get go. 

7. Enjoy this phase without depleting your savings

If you plan it right and well in advance, you can thoroughly enjoy this phase without sinking a hole in your savings. You do have to be clouded by financial worries. Neither does the burden have to fall on one shoulder. A baby fills the house with lots of joy and you deserve to enjoy it. 

A good option is to try to live on a single income for a few months before quitting work by saving the wife’s entire salary. This will not only give you an idea about how easy or difficult it will be to sustain but also help build a substantial corpus to tide over the difficult period. If nothing seems to work, the woman may have to rejoin work after the maternity leave. In such a case, you will need to have a support system at home to look after the baby. If you decide to hire a full-time maid or avail of daycare facilities, calculate the cost of both the options. A live-in maid in a metro city can shoot up your budget by Rs 10,000-15,000 a month. The best and simplest option is to be careful about planning for the baby and taking a call on sabbatical accordingly.