Going to become a parent soon? As you wait for the arrival of your bundle of joy, it is important to be prepared financially. Here’s how you can get started:
1. Have basic budgets in place
Apart from your usual expenses, you will have to allocate a budget for the baby’s needs. Food, diapers, visits to the doctor, and baby care products are some basic expenditures you’ll have to account for.
2. Plan your short term investments
Your short term goals could range from all the basic necessities like pram, cradle, and nanny to the ones which are a couple of years later like Preschool or Montessori. Debts funds are a great way to invest for such expenses.
3. Increase your emergency fund
With a baby coming into your life, your monthly expenditure will also increase. In order to cover that and your other expenses for unforeseen circumstances, increase your emergency fund. Make sure it can sustain all your expenses for a period of 6 months to 1 year.
4. Include the baby in your health insurance cover
Within 30 days of birth, make sure you get your child added to your health insurance plan. This will help you in case there are unforeseen medical expenses in future.
5. Start investing for your child’s college
You might be surprised by this but it is important, and must be included in this list. You can start with a small amount every month (using a SIP) and give your money enough time to grow over the course of 18 to 20 years. If you keep it for later, it can be difficult to catch up to the inflation-adjusted amount you will need for your child’s education. Starting early with equity mutual funds will not only help you to create the corpus but will also help you beat inflation.
Bonus tip: Start by investing the monetary gifts
In India, it is common to give the baby a gift on the first visit. Invest the monetary gifts you get in an option that doesn’t have a limit on the amount being invested. You could start a mutual fund SIP with just Rs.5000.
Scripbox scientifically recommends the best funds for all these goals. What’s more, we also track performance to ensure you reach your goal within the desired timelines.
Happy parenting and investing to you! :)