X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Are You a Responsible Parent? - Outside View by PersonalFN

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Are You a Responsible Parent?
Mar 17, 2015

The biggest moment of joy in the life of any couple is when they become parents. Addition of a child, is the beginning of a family and can bring immense happiness and love into our lives. However, along with this, another important thing that enters our life is - responsibility. Therefore, while you plan to begin a family, it is imperative to take several prudent financial decisions in the interest of your family's financial betterment. These decisions if left for the last minute can not only harm your finances but also affect your child's wellbeing. Financially security is extremely imperative for the benefit of your little one. Having a child, at a time when you don't have enough funds for his / her expenses can cause mental and physical discomfort to both you as well as your child. Hence, it would be wise to begin saving for this well before the birth of your child.

Although you might be extremely enthusiastic about a new member being added to the family, it would not make any sense to spend too much on things that are hardly going to be used by the child once he / she grows up. Instead of spending too much on the child's clothes, shoes, games etc. it would be prudent to make planned investments for the child's future.

While making investments for your child, don't get carried away by the name of any investment product. Also, don't let the marketing gimmicks of any sales person lure you into investing in any product without analysing it completely. Remember, it is your hard earned money which you are investing for the betterment of your child and it's vital for you do it responsibly!

Also, you must keep in mind that there are several small child related expenses, which when taken together can sum-up to a significant amount, such as day care expenses, nanny's compensation, child's medical expenses, and so on that are needed to be accounted for in your household budget.

You must increase your family's contingency reserves, as sometimes expenses related to children can crop up quite unexpectedly. Remember that, the cost of education has gone up manifold in the recent years and is expected to rise further up in future. Thus, it is necessary that you start saving for this in advance.

You should not delay in making your child the nominee for all your physical and financial assets, as life is uncertain. It would also be wise to write a will, if you have not already done so. Moreover, it is very important to ensure that your life insurance cover is adequate as the entry of a new member in the family means more financial responsibility. In case of your unforeseen demise, your life cover should be sufficient to take care of all your wife's and child's day-to-day expenses and financial goals. Also, remember that, medical expenses have the power to burn a huge hole in your finances. Hence, if you have a family floater health insurance policy, you must include the name of your child in the policy, or take an individual health insurance policy in the name of your little one. It would also be beneficial to increase your and your spouse's health insurance cover based on your needs, if the already existing cover is inadequate.

PersonalFN is of the view that in order to have a stress-free financial life on the birth of your child, all these financial decisions must be taken on time and should not be left for the eleventh hour. You don't want the sweetness brought in your life by the existence of your little bundle of joy, to turn sour due to your lack of awareness or lethargy in making the right financial moves. Be a responsible parent!

PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.

Disclaimer:

The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

Equitymaster requests your view! Post a comment on "Are You a Responsible Parent?". Click here!

  

More Views on News

Sorry! There are no related views on news for this company/sector.

Most Popular

How to Avoid a 90% Loss Suffered by This Super Investor(The 5 Minute Wrapup)

Jul 12, 2018

Blindly following super investors is a dangerous game to play. Here's how you can avoid such mistakes.

The Answer to Your Wealth Worries: Small Caps (Especially Now)(Profit Hunter)

Jul 10, 2018

If you're worried about the markets - you are on the wrong track. This is opportunity - put your wealth-building hat on, instead - Richa shows you how...

The Multiple Problems with the Minimum Support Price (MSP) System(Vivek Kaul's Diary)

Jul 11, 2018

The price signals that MSP sends out, creates its own set of problems.

New Fund Offer - ICICI Prudential Pharma Healthcare and Diagnostics Fund - Should You Invest?(Outside View)

Jul 6, 2018

ICICI AMC launches an open -ended equity fund following Pharma, Healthcare, Diagnostic and allied theme.

When Disappointment Panda is Around. Buy Quality Stock like This!(Chart Of The Day)

Jul 6, 2018

Buy Companies that can fight all kinds of Pandas and Bears in the long run.

More

Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

MARKET STATS