Mint spoke to some young families to find out how they deal with the various costs associated with parenthood.
View Full Image
The Google family
Google Llc employee Aman Narang and his wife Isha Aggarwal are parents to a 14-month-old son. While now in Gurugram, the couple was in Bengaluru during their son’s birth. The couple had an interesting start to spending on baby care as their parents were based in North India (Delhi and Haryana).
“Initially, for support, we used to fly down our parents to Bengaluru,” Narang said.
Credit card saves the day
Credit card points helped the family save money on these frequent and often last-minute flight bookings, as the couple didn’t have any close relatives in Bengaluru for support. “I used points on my Axis Magnus credit card to book 12-13 flight tickets during that initial period of five months. If not for the card, we would’ve spent close to ₹1 lakh on just getting our parents to fly down here. We shelled out just ₹15,000, charged as processing fees, on this unexpected expense,” he said.
“There were also some last-minute cancellations, but as these tickets were booked on points, a small point-based penalty was charged, but most of the points were credited back to the account,” he added.
Also Read: Diapers, doctors, schooling: know the costs of raising a child in India
The domestic help cum nanny
After their son turned five months old, the couple got external help. “We hired a domestic help cum nanny when we moved to Gurugram for a monthly salary of ₹20,000, who gives us 10-11 hours a day,” Isha said.
The couple moved to Gurugram to be close to their parents, Aman’s job offer and Isha’s transfer to the company’s (BlackRock Inc.) head office.
The baby car seat
The couple also tried to save by getting hand-me-downs from their friends and relatives. “I got a car seat from my sister-in-law as she is in the US and there it is mandatory to have a baby car seat. She gave most of the essentials that helped manage costs, e.g., booster seat, high chair, baby monitor, clothes, etc. We got a cot from another friend as a gift. Our families also ensured that they kept our preferences in mind while getting gifts for the baby because of which we could save a lot on essentials like a stroller, baby rocker, play gyms, developmental toys, etc.,” Narang said.
The couple follows an interesting practice when managing their household expenses. They have a separate joint bank account, which acts like their spending account. “Monthly spending for all non-savings items happens through this account,” Narang said.
The spending account
In the run-up to the pregnancy, the couple had added a buffer to this spending account, expecting a higher outgo. “We added ₹15,000 every month into this account. However, this largely got used for the delivery costs, which exceeded the insurance cover, and the cord blood preservation, which was also quite expensive,” he said.
The employer benefit
The couple plans to put their son in daycare in the next few months. Here, Narang will benefit from his employer’s collaboration with daycare providers. “So, we should get discounts on the daycare costs,” he said.
The couple is planning a 5-6 hour daycare, which would otherwise cost ₹20,000 per month. However, the couple may need to pay only ₹5,000-6,000 per month.
Total first-year cost
The couple’s monthly expenditure on clothes worked out to be ₹3,000, diapers ₹3,300, infant formula (5th to 11th month) ₹1,750 per month and nanny (from 5th month onwards) ₹20,000 per month, paediatrician visits ₹900 per month and vaccines ₹3,500 per two months during the first year.
The couple spent a total of ₹3.17 lakh in the first year, including the first birthday celebration, with a resort stay worth ₹30,000 for the family.
The traditional family
Mumbai-based Mayank Doshi, technology manager at Bank of America, and his wife Pankita, associate manager at Accenture, saved on costs by sticking to cloth diapers, getting their baby vaccinated at government centres, and thanks to gifting traditions in their family.
The couple spent ₹2.29 lakh in their first year as parents to a 13-month-old baby girl.
Pocket-friendly
Doshi said he had been lucky with costs. “My daughter breastfed for 10 months. Then, we gradually introduced her to normal buffalo milk. So, we never had to give her any formula,” he said.
The couple also used cloth diapers largely instead of disposable diapers. These also helped save on costs as cloth diapers can be reused. “We use regular diapers (not cloth) during the night to ensure she sleeps well. We also use them when we travel with the baby. We use regular diapers after the oil massage, as the baby is tired after the massage and needs good sleep,” Pankita said.
“The other advantage of cloth diapers is that it is said to be better against a baby’s skin,” she added.
The couple has also taken the membership of a toy library, which costs ₹600 per month. As far as vaccination is concerned, the family went to BMC (Brihanmumbai Municipal Corporation) centres, where vaccines are given for free. To be sure, the couple went to a private hospital for a few vaccines, which were unavailable at BMC centres.
“We have also been lucky as there is a tradition of gifting in our family and extended family. So, we received a lot of gifts for our baby like clothes, toys, baby cot, crib, sleeping cot, stroller, etc.,” Doshi added.
For the baby’s first-year birthday anniversary, the couple had a small family get-together at home, which cost ₹7,000.
Work set-up
Both Doshi and Pankita work in hybrid mode. This flexibility allows the couple to look after the baby. Though the family has employed a nanny, the couple said they needed to keep a watch to ensure the baby’s routine was followed.
The nanny is paid ₹15,000 per month for ten hours. “My mother is also at home, but having a nanny allows everyone else to follow their own routine,” he said.
The self-employed parents
For Shravan Suratwala and Divya, a Pune-based self-employed couple, the expenses of raising a child started right from Day 1 as they didn’t have maternity insurance coverage from an employer like most salaried individuals.
“We had a personal insurance cover, but the waiting time on the maternity benefit was much longer,” Suratwala, a chartered accountant, said.
The couple spent ₹1.3 lakh in delivery costs. Suratwala said that diligently maintaining a contingency fund helped deal with these costs. “I usually keep around ₹4-5 lakh in savings, roughly five months’ worth of expenses and investments. Before delivery, I ensured it was around ₹6.5 lakh,” he added.
Nanny troubles
Suratwala said Divya, a company secretary, largely took care of the baby during the initial months. “As we are self-employed, there was no pressure to resume work in six months. So, she was able to be with the baby for longer. It was when my wife wanted to get back to routine, we tried to work with a nanny. Our son was nine months old when we first tried one,” he said.
The monthly cost of getting the nanny was ₹10,000 for eight hours daily (10am-6pm). However, the couple decided to do without a nanny after trying two in two months. “We were not happy with how the nannies handled our baby. They were not open to following instructions; there was a lot of resistance to learning our ways. Also, they were not very reliable considering a proper schedule needs to be followed when a baby is around to ensure the baby’s feed timing and sleep timings don’t get disturbed,” Divya said.
“We decided that we need to put our son in daycare. So, when he turned one year old, we put him in daycare close to our house as it would help us get back to our routine and also help the kid be socially active and be around kids his age rather than being stuck with a nanny,” he added.
The couple pays ₹13,000 monthly for the daycare (10am to 6pm).
The couple stays with Suratwala’s parents. However, both sets of grandparents are also pursuing their professions and businesses. In fact, Suratwala’s father is a practising chartered accountant, and the couple is working with him to expand the practice.
Indirect costs of daycare
Putting their son in daycare has led to some indirect healthcare costs. “We have seen our son falling sick many times after joining the daycare because kids quickly catch stuff from other kids. Nothing major, though,” he said.
Still, Suratwala added that they find daycare more convenient than keeping a nanny. “We get time to do our work, and the kid is not stuck with the nanny. Also, keeping just a nanny is not enough, as someone has to be around the nanny to monitor how the child is being cared for. So, the entire point of getting back to routine is defeated,” he said.
Second-hand baby stuff
The couple has tried to save costs where they can. “We found a platform that sold rarely-used strollers at 50% of the original cost. It’s unpredictable whether the baby will sit in the stroller and for how long. So, buying an expensive stroller did not make sense,” he said.
“We are also fortunate to be around people who have gifted us useful things. We got a travel stroller as a gift from our friends as we were planning an international trip with the baby,” he added.
Overall costs
On average, the couple has spent ₹1,500 per month on baby clothes in the first year, ₹2,000 on baby formula, ₹3,500 on diapers, ₹8,000 per month on baby massage, etc. Overall, the couple has spent ₹2.34 lakh on the baby’s first year. The first birthday party cost another ₹1 lakh.
Needing a village
As they say, you need a village to raise a child. Bengaluru-based Gunjan Vijayvargiya and Bharat Vijayvargiya had actually set up a village in their house after their baby boy’s delivery. “We had everyone at home initially: my mother, mother-in-law, father-in-law, sister-in-law, and her husband. So, we had a lot of support,” Gunjan said.
However, she said their household budget sky-rocketed during this period to about 2.5X. “But the family support ensured the transition was very smooth for me,” she added.
The search for a massage lady
While Gunjan doesn’t intend to keep a nanny, she has a massage lady. “Earlier, the massage lady charged us ₹3,000 per month for the baby’s massage and bath. But after I went to visit my parents in Bhopal, she got other clients, and now she doesn’t have any free slots. So, she just comes to give a bath to the baby, and I do the oil massage. The lady charges us ₹1,500 per month for this,” Gunjan said.
She pointed out a supply-demand mismatch for massage ladies in her neighbourhood. “The massage lady we actually wanted charges ₹9,000 per month, but her slots are just unavailable,” Gunjan added.
Clothes and diapers
Gunjan said they are spending ₹5,000 on baby clothes per month. They aren’t spending anything on baby formula right now, as their six-month-old baby is breastfeeding.
Their diaper costs are ₹2,000 per month. “A lot of clothes buying is impulse-driven as you always look for clothes that will look good on the baby,” she added.
Costly vaccines
Vaccines have also been costly for the family. She said each dose so far has cost ₹9,100, with the pediatric consultation costing another ₹900 every time the vaccine is given. The doses are typically once every two months.
She wants to avoid getting a nanny, as she is not comfortable with having one. “We hope my in-laws will stay with us till our son turns one year or year-and-a-half old. Then, we will see if we need to put him in daycare or playgroup,” she said.
Overall, if their current costs are annualized, the family is expecting to spend at least ₹2 lakh in the first year as parents.
Indirect costs
Apart from the direct costs, the couple also spent ₹50,000 on their parents’ flight tickets. When the baby turns one year old, the couple also plans to keep a small event, which would be an additional cost.