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What To Expect When You’re Expecting

What To Expect When You’re Expecting

Raising a child is a huge financial responsibility. You’ll be spending on many things other than just on roti, kapda and makaan. A bulk of these expenses will be incurred on education followed by housing and then entertainment. So, here’s a complete break up of all expenses you’re likely to incur as a parent:


Expect to spend around Rs.31 lakh on your child’s education from birth until they graduate (assuming you send him/her to a private school). These costs may reduce if you send your child to a public school but may rise if you send your child abroad. Further education costs go on increasing every year, thanks to inflation.

To tackle these costs you may be tempted to take up an education loan because interest payments on education loans come with tax deductions. But sometimes education loans can be more expensive than a car loan >>>

HDFC Bank interest rates on a car loan-8.40%-11.10%

HDFC Bank interest rate on an education loan-11.97%

Some Ceralac for thought!

Having a baby might mean managing on a single income for some time. So test yourself and try living on one income before the baby comes.

Avoid the financial stress of a loan by investing for your child’s education in any of the following options-

Debt mutual funds-

These invest in debt (fixed income investments) such as bonds, they’re safer than equity and usually give returns between 7%-9%. They could be short (1 year), medium (1- 3 years) or long-term (more than 3 years).

Bank deposits-

Fixed and recurring deposits are an alternative to debt mutual funds. They give guaranteed fixed returns of less than 7%. But since the returns are slightly lower they’re ideal for saving not investing.

Stock markets-

Stock markets can give returns over 15% or less than 1% and this fluctuating nature of returns makes them riskier than debt. But if you remain invested for a long time (more than 1-3 years) the risk reduces.

Equity Mutual Funds-

If you’re wary of investing directly in shares then you can invest in them through equity mutual funds. But returns might be lower since mutual funds charge fees to invest money on your behalf.

Balanced funds- 

To invest in both debt and equity you can invest in balanced funds that give returns over 12%. They’re also known as hybrid funds and usually invest 60% in stocks (equity) and 40% in bonds (debt).

Considering all these options if you need Rs.13, 00,000 for your child’s education in 10 years you’ll need to invest at least Rs.11, 000 per month, assuming it earns a minimum of 7% interest annually and considering there is a yearly inflation of 5%.


Expenses incurred on your child’s food and clothing needs aren’t a lot compared to education. In the initial years, costs for food could be high because children have special dietary requirements. But once they’re older these costs reduce. On an average, you’ll spend Rs.3.37 lakh on food.


Just like food, expenses incurred on your child’s clothing are higher when he/she is young because children outgrow their clothes. But over time these costs reduce. On an average, expect to spend around Rs.4.04 lakhs on clothing.


After education, another huge expense that you can expect is on housing. Till your child is 4 you can live in a single bedroom apartment. But once he/she grows older you’ll have to shift to a bigger house. Housing costs could approximately amount to Rs.12.8 lakh and may increase due to inflation.

Who knew diapers could cost more than a phone!

Typically a baby uses about 3360 diapers in its first year and the average cost of one diaper is approximately Rs.11. So in the first year itself, you might spend 36,960 only on diapers!

Pro Tip: You can save on diaper costs by buying in bulk, such as a supersaver pack.


In Madonna’s words since we’re living in a material world, it’s not surprising that expenses on entertainment exceed expenses on food and clothing! This includes money spent on toys, books, internet connection, movies, gadgets etc. and total up to Rs.8.08 lakhs.


These costs are mostly for your child’s transport to and from school and college and include smaller family holidays within India. Expect to spend around Rs.3.37 lakhs on transport which can easily be reduced with the usage of public transport.


On an average expect to spend Rs.2.69 lakhs on healthcare including prenatal, maternity expenses, vaccination costs, and basic healthcare facilities. These costs are more when your child is younger and reduce as he/she grows up.

Before having a baby check your health insurance plan to see if it covers maternity expenses. If it doesn’t, don’t worry. You don’t need to get a separate maternity insurance plan. These plans can be expensive and come with lots of terms and conditions. Just invest a small sum every month in short-term debt funds to build a sufficient corpus for when you’re pregnant.

Vaccinations can cost approximately Rs.47,380 from birth till the age of 5!

*Someone please pass me a baby wipe*

Other Stuff

Any miscellaneous expenses such as electricity bills, toiletries, and additional wages for household help add up to Rs.2.02 lakhs and may increase depending on your standard of living.

*Kaching* after calculating all expenses under the above heads your total bill for raising a child= Rs.67.4 lakhs. And that’s before inflation, after inflation this cost could go up to even Rs.1.07 crore!

A summary of all the expenses you can expect when you’re expecting-

  • Education
  • Housing
  • Entertainment
  • Clothing
  • Food
  • Transport
  • Healthcare
  • Others

A baby-proof plan for your baby's expenses-

Divide your goals into short, medium and long-term. For short-term goals like your child’s birthday celebrations, preschool etc. invest in liquid short-term debt funds that give around 7% interest, for medium-term goals such as primary & secondary education invest in debt funds that give around 9% and for long-term goals such as higher education and child’s wedding invest in equity funds that give over 12%. Now depending on these rates and your goal amount you can quickly calculate how much you need to save per month using this calculator.

Miss Manage tips & tricks for “to be” mothers-

  1. Finding out about maternity benefits from your company.
  2. Getting life and health insurance for your child from the day they’re born.
  3. Creating good investments for the baby’s future.
  4. Not impulsively indulging in buying baby clothes & toys.
Please note that all costs are indicative and may rise or vary in the future.
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Talkative, clumsy, punny, intuitive are just a few buzzes of this queen bee. An aspiring business journalist looking to find her throne in the corporate world.

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