YOUR FIRST CHILD AND TOP WAYS OF FINANCIAL PLANNING
To say that one’s life changes radically after the arrival of a baby is quite an understatement. The surge in glee is in tandem with the spike in several expenses, along with emotional and physical turmoil at par with the financial stress. While you might take numerous measures to stabilise your mind and body, surprisingly very little financial planning and preparation is undertaken by individuals to deal with the new development.
One of the most important things that you can do as a young parent is planning for a secured financial future for your child. This article will provide with financial tips for new parents
Financial tips for new parents
Following are some of the financial tips to ensure a secured future for your child:
- Re-plan your monthly budget
Budgeting is one of the most integral parts of a financial plan. Parents often fail to realisethe significant increase in expenses with respect tothe addition of a new member in the family. Apart from daily expenses on baby care products and medical expenses, there are future expenses that one should prepare in advance. Keeping all these points in mind, an individual should revise their monthly budget and increase it by a minimum of 10%.
- Update your health and life insurance
Most insurance plans cover newborns soon after the completion of 3 months. It is advised to add your youngster to your current family floater health plan. If your existing policy is insufficient, consider buying a new one. This helps in saving a considerable amount, including your child’s medical expenses, several vaccinations, etc.
- Consider investing for your child’s higher education
As the educational costs are increasing at a significant pace, it’s important to invest in mutual funds to aid your child’s higher education. The sooner you start you better. The earlier you start, the significant is the impact of the power of compounding on your mutual fund investments. Further, long-term investment help to stabilise the volatility in the market.
- Consider different investment options
There are different types of investments available to a parent to cater to various needs of his child’s future. For short-term goals such as primary education or a grand birthday celebration, parents can consider investing in debt mutual funds. However, for long-term goals such as higher education or marriage, you can invest in equity mutual funds. You can also consider ELSS funds, as they serve the dual benefit of tax-saving and significant returns.
If you are blessed with a girl child, you can consider investing in SukanyaSamridiYojana scheme.It is a government-backed savings scheme, which is a part of the ‘BetiBachao, BetiPadhaoYojana’. This child (girl child) investment plan is designed to aid you to build the desired corpus for your child’s higher education or marriage. The investment scheme is tax-free and offers a fixed interest rate of 8.5% p.a. It can be opened by either parent of the girl child who is below 10 years of age. The tenure for the scheme is 21 years or until the child marries after 18 years of age.
Being blessed with a child is a fantastic journey that you can embark upon. Like every parent, if you wish to secure your child’s future, consider the above-listed tips and enjoy the sense of satisfaction. It’s also vital to realise the importance of investing at an early age. Happy investing!