Becoming a parent is an indescribable joyous and emotional moment, and it marks the beginning of a new journey that is exciting. The new parents would surely start feeling the weight of responsibility on their shoulders, which would be probably the most they ever felt in their lives so far. The important component of this new responsibility is being financially prepared for the new list of expenses that you need to take care of while ensuring the financial safety of your family and kid, comprehensively. By following a few simple financial tips and taking financial steps in the right direction, it would be helpful to fulfill all your financial duties and responsibilities without struggling. Following the below-mentioned list would be helpful for the new parents to get started in the right direction financially.
Increase Your Savings
The expenses are only going to grow from here on, and it is important that you start to save money. Increasing your savings would help you, later on, to take care of rising expenses. If you have an emergency fund set up, it is a good idea to contribute to it generously now. Any kind of emergency at this point after becoming a parent can be difficult to face financially and thus, having a sizeable amount of emergency fund would act as your financial backbone in such times. Investing in the best tax saving mutual fund would also help in creating a corpus that would add to your savings considerably in the future.
Stay Prepared for Bigger Expenses such as Healthcare
The new parents must be prepared for bigger expenses, including health care and medical expenses. There are many health cares and medical expenses that you need to take care of as the baby grows, including visiting pediatricians from time to time for vaccine and regular health checkup. Adding your child to the family health care plan is essential, and it would come at a price that you should be ready to pay. If the above-mentioned medical expenses are not covered by insurance, it will put you in a heavy financial burden.
Buy a Term Life Insurance Policy, If You Haven’t Already
Buying a term life insurance policy is important to protect your family financially in case of your unfortunate death. Life does not come with guarantees, and you need to consider the quotient of uncertainty when planning your finances. Having a term life insurance would provide you with peace of mind that is necessary to keep negative thoughts away. Calculate how much your family would need to move on financially and buy term life insurance policy accordingly. It is comparatively cheaper with respect to the cover it offers and is a small price to pay to provide comprehensive financial protection to your family.
Start SIP to Cover Education Expenses
Your child is going to start within three years of your child being born. It means that you have to start saving to cover education expenses. It will allow you to avoid the stress of giving a lump sum of money in one go. Education inflation in India is quite high, and you need to keep it in mind when saving for your child’s education. It is a good idea to get an estimate of the school fees around your place so that you know how much you need to save. When you have a head start, you are going to make a better decision about the kind of school you want your child to get into without worrying about the cost.
Save for College
A college education will become more expensive as your child grows old. When you start to invest small when he or she is small, it will put less pressure on you as they grow up. Since at this point, your financial responsibilities are low; you can easily start investing in a good equity mutual fund that would help your child get into the college. It is even more essential if you want your child to get higher education in a foreign institute.
As you start a new phase in your life, being financially prepared allows you to enjoy your parenthood without any worries. It is best to discuss your financial plan with your partner, and you both start to invest together for your child’s bright future.