As a new parent I can surely tell that one of the most important fact that is associated with new parenthood, is being responsible financially. Although, a lot is said and done in respect of the financial gifts from all the relatives, since we are living in a relatively modernized India, it is the nuclear family concept that encourages me to write this column. And your life completely changes when you have a baby. So financial Planning is must. Thus, I have listed out my FIVE FINANCIAL GOALS FOR NEW/EXPECTANT PARENTS as per my experience:
Purchasing a Health Insurance:
Sure, we have all heard it before, but we as Indians think a lot less in buying this particular idea of health insurance. Going by the rising costs of the delivery of the child at a reputed hospital/nursing home, it becomes imperative for expectant parents to purchase a health insurance, which covers the expenses related to you being a parent. Major health insurance companies nowadays provide you attractive health packages covering your maternity and also expenses from day 1 of your newborn child.
Believe me, it takes pressure off your chest!
Start to build a financial goal and set up an emergency fund:
It has always been maintained that we should start early to win at any situation. To enjoy your time with your little one, you need to start early and plan financially for the expenses that are not covered as stated above. Obviously, we have 9 months to prepare. Divide your delivery and other related expenses into 9 equated monthly savings. Surely you will build a corpus close enough to provide respite w.r.t rising/unforeseen costs. Automate your savings by way introducing standing instructions, which will force your financial life around a specific financial goal.
Track your expenses:
Going into parenthood will make you incur such expenses, which you have never even dreamt of earlier. So my personal advice on this is to at least track your expenses every month during the period of pregnancy, keeping receipts of the diagnosis at the hospital/nursing home, medicine costs, etc safely for estimating/tracking your expenses. In this way, you will be more on the expected lines to save your money as per agenda no. 2 mentioned above.
Talk to thy neighbor:
With this point, I wish to highlight how I was able to save on unnecessary expenses that you might be pushed by the hospital authorities to get into. Obviously, as an expectant/new parent, you will turn every stone possible to safeguard the health of your child but only few of us know that there are many small things that can be avoided and in return you save your hard earned moolah.
Talk to your parents/friends who are already parents/ or any couple who have travelled or are travelling in the same boat as you. By doing this small exercise not only do you build your circle but also in the process eliminate many non-essential expenses.
Purchase a life insurance:
Like I said above, parenting takes a toll on you as it makes you nervous/anxious about the future of your dear little one or for that matter your spouse. Hence, it is prudent to purchase a good life insurance. You can opt for term plan (where you just insure your life for a particular value without looking for returns) or you may purchase a life insurance which not only will insure your life but also provide money back on crucial junctions of your kids life (like for education, marriage, etc). It is advisable to cover your life for a minimum of 10 times of your annual income. God forbid any worse thing happens, your family can continue to live with financial dignity.
So these were FIVE FINANCIAL GOALS FOR NEW/EXPECTANT PARENTS.
Happy Parenting with Budding Star