Do you remember the feeling you had when you first time held your child in your arms? That feeling when your fingers touched the soft skin of your tiny tot! Some say it was the most beautiful moment of a parent’s life; others named it as a responsibility. A part of this responsibility is to give all the best amenities to your ‘little angel’.
From the time the ‘bundle of joy’ comes in, parents have a tough time taking their eyes off their little angel. After all, having a child is the most fulfilling experience of one’s life! But along with it comes a great amount of responsibility. The future of your baby is in your hands. The foundation of your child’s beautiful future depends on the decisions taken by you in the present. And hence it is imperative to take the right steps today!
Proper planning and execution are of utmost importance, especially when it comes to financial decisions concerning your family. Though taking a right financial decision to tackle the growing needs of the family is a daunting task, it should not deter you from planning ahead of time.
Financial planning for your baby:
Before the arrival of a baby
• Check your company’s maternity benefits: If you are a working couple, check your company’s maternity benefits. Nowadays, almost every company offers maternity cover and paid leave. Check for the maternity insurance offered by your employer. Additional savings might be required to tide over financial expenses once you take a break from your work after the delivery. For that, it is imperative to have a proper savings plan, and it takes us to our next step.
• Saving: During pregnancy, many unexpected expenses can come up, like medical tests, C- section, etc. So, create an emergency fund equal to 3-6 months of your living expenses.
Nowadays, marriage and higher education of a child are not the only big-ticket expenses that you will incur. Expensive short-term needs like tuition fees, coaching classes for music, cricket, etc. may also pop up. To be ready for such unexpected expenses, invest in products like debt funds or fixed deposits. The latter is for those who belong to the lowest tax slab. You can invest in equities via SIPs as well which allow you to start your investment with amounts as small as Rs. 500.
In addition to this, start budgeting all kinds of expenses and income. Try cutting down on irrelevant expenses and automate your savings as much as possible so that you do not spend your savings on frivolous things. This habit will help you save considerably for your future financial goals.