Once the baby is born, amongst the other things you get involved in and do, there is very important and critical matter that one needs to address. For me, it came as a learning as soon as I became a parent and here are my recommendations to consider regarding finances post child.
I would like to list 5 recommendations for every parent’s consideration:
1. Savings Account - Do open a savings account; sooner the better. Start with the money you receive from people as gift and start depositing in the same. Remember, you never had this money and were managing well, you don’t need it now either. Please save it for the little one!! If you have a girl child, you can open ‘Sukanya Samridhi Account’ which is under Government scheme and has better interests, it requires some minimum amount INR 500 to be deposited every year and maximum INR 1.5lacs.
2. Child Education Plan/similar investment - Nothing is early, if it concerns secure future of your child, the sooner you invest better it is as you might start reaping the benefits at the right age of the kid with better premiums to pay now too. My idea is not to promote certain schemes but the idea to invest for child’s education. There are some great plans available in market like LIC – Jeevan Tarun (part of my portfolio), HDFC Children’s gift plan etc. You can choose to go Big Bang (one-time investment) scheme or a phased (monthly/yearly) one, money-back schemes for short term or long-term goals depending upon on your financial planning.
3. Family Floater Health Insurance - Well, I postponed this one for some time but convinced now to have this in the kitty as sometimes company linked Health Insurance is not sufficient and has dependency on your job. The earlier you get a family scheme at right age with no /less health problems, the better premiums you will get. Please explore some of the options like National Insurance (better settlement rates, higher premiums), MAX Bupa Health Insurance (supports multiple claims in a year with top up) etc. depending upon your needs and investment appetite.
4. Life Insurance - This is little touchy and shares different believes as why one needs to buy a life insurance for kids. I shall leave you to be the best judge for the same. However, there are some schemes available in the market which offers combined life insurance for you (guardian) and your child like LIC Tarun etc.
5. Lastly, do save for Leisure and fun too - Create a separate account if need be. Do keep a small amount monthly aside to do what you like and enjoy as a family. For us it is travel to various places and after first vacation with my kid I have come to believe that Kids love vacations too and this will become more of a need for years to come.
Start small and Save BIG. Do start investing smaller amounts towards above and you shall repeat the benefits before you realize. Don’t wait for things to work out later as you do know, time is money!!
Also, a request, if you do happen to read the same and apply, kindly pass on the word to staff/maids working under you as they might not have the platform to read but can surely benefit from some of the pointers above if not all.
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