It is often said that what makes us rich is not the money in the bank but the habits we encourage. As parents, it is highly important to keep a track of all your expenses. Planning for a child’s future needs in terms of education, medical care, and investments is a crucial part of your role and responsibilities.

The stature of a parent is glorified and a conditioned expectation in most families, don’t you think?

But the failure to be equipped with the changing requirements of your family as your child steps into adulthood will prove to be a financial catastrophe for you and your family. Let us look into the story of Samantha and Ram to distinctly understand these consequences.

Samantha and Ram were very excited to be expecting their newborn in four months. As the delivery date came closer, they started preparing for the baby’s arrival. However, they were unaware of the financial responsibilities that would engulf them at that point in time.

Soon after their baby’s arrival, the monthly budget of the family increased exponentially. They ended up having to cut down their multiple investments to manage their expenses which resulted in a loss of bulk corpus to stabilize their future financially.

To avoid falling into the pitfalls of not being financially equipped to handle your expenses when you become a parent, here are few tips you and your significant other can follow:

1. Budget estimation

When you become a parent, you need to take into consideration the increased monthly budget that includes an estimation that takes into consideration the needs of your child. In times like these, it is essential to strictly evaluate a new budget by making a few changes to your old one. This process might require you to cut down on your expenses to a considerable level. Also, you can scrutinize what all you need to do to stabilize your expenses. It is a much better option than draining your investments to maintain stability.

2. Coverage for emergencies

With the arrival of the baby, the expenses are bound to increase, but the annual family income will stay the same. During these times, it is best to structure coverage of emergency funds.

The advisable option to create this secure umbrella is to accumulate a minimum of four to six months of your salary as a deposit account. This deposit account can be used separately in case of emergencies in the future.

3. Investment goals

When it comes to your future, investing prudently is one of the factors that can’t wait. As a parent, you need to make sure that you allocate monetary assets in the form of fixed deposits. Choosing fixed deposits with an interest rate over 8% will ensure that you have enough funds for your child’s education and marriage expenses in the future. Regular investments prove to be the key in availing inflation-beating returns even 17-20 years in the future.

4. Health insurance coverage

After three months of birth, a child is eligible for health insurance cover. It is your responsibility to invest in a policy that provides you with continual interest throughout your child’s life.

5. Avoid debts

Debts are potholes of danger that can create financial turmoil for your family. To be a responsible parent, you should form an atmosphere of no liabilities, especially when it comes to loans for your children that are impossible to repay in the future.

The journey to and throughout parenthood is overwhelming. You are suddenly in charge of a life and learning to grapple with this new change in life. It can truly be life changing as the decisions of today can affect the future of your child tomorrow.

Hence, in a nutshell, investing in right places is the key to unlocking the door to your child’s secure future. So, what are you waiting for? Reach out to me and I will be happy to guide you with the best insurance policies to help you sail through. Seek expert advice in the best possible way and know more about insurance plans suiting your needs and requirements.