Remember the first time you touched or held your baby? Most describe this feeling to be out-of-the-world, exhilarating, satisfying and beautiful. It surely is the most fulfilling experience of one’s life. But we rarely speak about the streak of responsibility that keeps lingering on the minds of new parents all through the journey. Financial planning is still a very hush hush topic that one doesn’t discuss openly with friends/family and ends up taking suboptimal financial decisions. Let me take you through the 6 Financial steps to take as new parents.


Every parent wants the best for their baby. It’s a life you have created so the responsibility of building a strong foundation is all yours. To ensure a bright and secure future of your baby, it’s imperative to start planning early.

In today’s times financial goals are not limited to saving for higher education or child’s marriage only. There are several expenditures that crop up in the short run itself. From 1st birthday celebration to dance or music classes to annual family vacations to what not !

So here I am listing 6 steps one should take with respect to financials as a new parent (basis my personal & professional experience).

Check out the maternity benefits

This is really important if you are working. With the recent approval of Maternity bill, 26 weeks of paid leave has been mandated by the government. Check for maternity insurance with your employer. Keep all relevant documents handy.

Start saving

Those 9 months would comprise several ultrasounds, tests, doctor visits, preparing for welcoming the little one, organising baby shower and so many other things. Start accumulating funds for these. But, ensure you don’t go-over-the board for any frills around just to keep up with the social obligations.

Review your Life Cover

With a new life to take care of , you and your partner play an even more important role here on. If you/your partner already have a term plan, re-calculate the apt amount of life cover. In case of any mishap, your baby’s future would be secure to a large extent basis this. As a thumb rule, I would recommend capping up the existing cover by 40-50 lakhs.

Updating baby’s name across your Financial products 

If you have existing health insurance or employer has provided the same, update the baby’s name as dependent. Also, in your bank accounts or deposits you may wish to update your baby’s name as Nominee.

Start a Recurring Deposit (RD) or Systematic Investment Plan (SIP)

I would recommend this to be far better than ULIPS (Unit Linked Insurance Plan) that are being marketed as Child Plans. Those turn out to be an expensive proposition and are quite complex with inclusions like insurance, investment and cover charges. A simple RD would keep things in your control and help you achieve specific goals. There are some banks (those who know me would know which bank!) offering flexible Recurring deposits wherein you can choose a goal, time period and have the flexibility of deciding what amount is to be deposited towards your goal each month. You can invest in equities as well through SIPs which starts from as low as Rs 500 per month. Take help from an advisor and pick one basis your risk appetite and investment horizon.

Stick to the Basics (PPF, SSY and Savings Bank Account)

A PPF or Sukanya Samridhi Yojana would turn out to be the best bet for starting an investment in baby’s name. These long-term options not only ensure financial discipline but also offer tax free compounding returns. Opening a Savings Bank account in the name of your baby would make it easier to link these long term Investments.

When it comes to planning financials, we generally have a tendency to procrastinate. More so, as new parents, it is hard to find time out and think about how and where to start. But it is always a good idea to plan ahead and prepare well.

I hope these basics would come handy for all you new parents and help you plan for a bright future for your baby.

Do you have any recommendations or tips that would help other parents? Please do share in comments below.

Go Mommy!

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