Financial Planning Tips When You Become a Parent
“All days are not the same, save for a rainy day”
The mentioned quote by M.K Soni is of great significance for parents who tend to invest in giving their child the best lifestyle. Parenting is not just a blessing but an everyday struggle to improve oneself. If you are not well accustomed to changing your mindset and spending habits, then financial tensions will add to the mental stress.
Ramya was a postpartum woman. Her husband was working in the military and they were not very sound financially. They were also struggling to pay their rental dues. Regardless, they held it all together until their child was born and didn't opt out of the insurance policy they had taken a few years ago.
With the menial salary and her father's life insurance cover to which she was the sole beneficiary, Ramya was equipped to start FDs under her child's name and save money for her son's education expenses. Devising a household budget when her son was born and cutting down her expenses allowed Ramya to support her family in a better way. Here are few essential tips you need to follow to regulate your finances when you become a parent :
- Accumulation of Savings
Regulating monthly stipend to save proves to be a significant factor that gives parents a head start while planning their finances to welcome the child into the family. Having multiple savings accounts with varied closing periods is an effective method to achieve a certain level of financial security throughout parenthood.
2. Steer Clear of Debts
Taking multiple loans for the benefit of your child can prove to be burdensome. Instead of enjoying the bliss of parenthood, you will most likely be worried about repaying your debt with high interest rates. Through serving the purpose of instant gratification;debts accumulated over a period can result in the breakdown of your financial goals in the future. If you choose to take student loans or mortgage loans for your child’s future, it can prove to be detrimental at later stage. Also, you may feel tempted to close safety deposits or pre-existing FDs to repay your debt but this will result in an unstable financial future for your family.
3. Mapping a Monthly Family Budget
The cost of raising a newborn can be on the higher side. Therefore, structuring and evaluating the monthly budget for your family is important. Stability is integral to be able to handle your household expenses better. This monthly budget might require you to cut down your expenses, and allow you to assess funding for your
child's education, medical expenses, and cover your other costs which can be included under the umbrella of childcare.
4. Investing In Child Insurance
Investing in a child insurance policy is a known way of securing life insurance and long-term investment of monetary funds for your little one. Investing in child insurance proves to be an astute decision as the returns and the mortality charges over full term seem to be higher than the insurance schemes for adults in your family. A child plan will also assure that the parents are investing per year to formulate a stable financial future for their child. However, to avail maximum benefits in times of need, it is essential to choose plans that carry significantly close range closing periods.
5. Emergency Savings
There are multiple reasons why a separate load of monetary assets for emergencies could prove to be useful for your childcare support. When unexpected bills pop up while you are raising your kid, you don't want to turn to your deposits, do you? Emergency funds can help you have solid ground beneath you at all times. Coverage of unplanned expenses will be well taken care of if you decide to start an emergency fund for your family effective immediately. Parenthood can be a daunting task. Therefore, not being well equipped to handle financially tense situations can be a mental distraught. So, now that you have all the tips and tricks to secure a stable financial future for you and your family, it is time to secure your future! What are you waiting for? Get in touch with me for your queries and
doubts. I will be happy to assist you in the best possible ways with the right insurance plans according to your budget and needs. Seek my expert advice to know more about various ways in which you can support your child financially.