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I watch couples getting financially stressed-out after the entry of a newborn into their lives. This surprises me, as to why are they not prepared for this upcoming financial overhaul from the moment they realize they are pregnant or during the 9-month gestation. Well, the raises a question as to when is the right time to start saving for the kid’s future.
“Parenting starts the moment you decide to become pregnant.”
As unreal as it seems, this is true.
This might not be applicable in some families where unexpected pregnancies come as a blessing, but what we are discussing here is Planned Parenthood. I have come up with some simple and easy ways to save for your kids’ education and future, and not to forget their upbringing too. Being financially organized and disciplined- has never been easier.
Save first and Spend the rest
Consider a couple, both earning INR 40,000 each and living a financially-comfortable life. Irrespective of the fact that the couple is expecting their first baby, their incomes tend to grow at the usual rate. If the mother is on maternity leave, the father is flooded with additional expenses related to pregnancy and childbirth. In view of such circumstances, it is always essential to come up with a proper savings plan at least a year before planning to conceive.
5 Money-Saving Hacks for couples who are planning to conceive
Start by saving 25% of your salaries every month
Yes, one most simple and hassle-free ways to save is to find the percentage of your income you are comfortable saving with. If you are both earning, saving at least 25% of your income each (read again, I said each) into systematic investment plans like mutual funds (low-risk if you’re not an expert in this area) or simple monthly savings such as Recurring Deposits.
If you’ve got that huge promotion coupled with a huge bonus at work, you may even consider opening a fixed deposit with a maturity date around your expected delivery date. These not only serve as tax-saving investments but also contribute to your long-term saving plans.
Let your child feel special
If you’ve already got your own savings, much appreciated. Now, let the child feel special by opening a new SIP, RD or a FD for the baby right when you know you are pregnant. Always remember that these funds should not be locked and should be redeemable whenever needed.
Since you are saving for the kid, they can be utilized for delivery, play school fee, kindergarten fee; or the child’s mandatory medical and upbringing expenses. This way your routine salaries and other investment and saving plans remain undisturbed.
Know your limits and stick with them
Being a parent is overwhelming. You are elated and exhausted, both at the same time. In an effort to provide the best for your kid, you shouldn’t lose your financial wisdom. Lot of couples spend huge amounts on overpriced toys, clothes and other items, without setting a limit.
If you are ready to set aside a certain amount of money for your child, be firm and disciplined that all purchases will happen within the budget. If you sense that you are going over budget in a month, try to balance the same in the coming months.
The bottom line is, let your kid have their own budget for their personal expenses. After all, a penny saved is a penny earned.
The best gift your child gets is Quality Education
Many parents are under the wrong notion that expensive gifts and hi-fi lifestyle can make their kids happier and grateful. As much as they make your kids happy, they cannot give them life-time satisfaction.
Imagine you started saving INR 5000 per month when your kid is 1 year old. By the time, he/she is 22, you have approximately 15 lakhs worth savings that can be utilized towards further education without putting additional burden on your pension plans or personal savings.
Planning for Pregnancy, coping with infertility
One main reason pregnancy begins the moment you plan to conceive is because of the unpredictable medical reasons that impact fertility and pregnancy.
If any case, you need to spend those additional bucks on fertility treatments, your savings will come in handy to keep you ready for those unexpected expenses on health and nutrition during fertility treatments. In case, everything goes well, you still have those savings towards your kids’ upbringing. So, that is a win-win.