Make the Investment Planning Before the Birth of the Child
sachi shiksha

Are you expecting a child? You both are going to be parents soon? It certainly is a matter of joy for both the man and wife.

The child’s future is everything for you. Naturally, you must save something from your for your child’s future.

But you have not yet thought of the investment yet for your future child? If the answer is yes, hurry up and take the advise and start thinking about the investment now.

Experts believe that investment is even better than income. Even before a new member comes to the house, start making some investment for him or her. Think of new plan and savings for the child who is about to arrive.

Make investment a habit

People in India have not been able to make investment a habit even now. Brushing our teeth, taking bath are our daily habits. In the same way investment should also be made a regular habit. It is not necessary for you to go for big investments. There may be several delays in making big investments, keeping aside a big chunk of money for example is one. Therefore don’t just think of making big investments always. Small investments can also serve your purpose. You can move ahead the financial safety vehicle through smaller savings as well.

Find out new ways of savings

After you have made the necessary expenditures, go for smaller savings. From the birth of the child till he or she reaches the age of 20, make small investments in the name of the child. You will have to spend at least Rs 20 to 30 lakhs on the child till he or she attains adulthood. Around half of this amount is likely to be spent on education of the child. Therefore the faster you begin saving the better it is for you. Mutual funds can be a good savings option for you.

It is not necessary to buy everything

If in the love of the child you keep buying everything, it may not be good from the savings point of view. The things that you buy for the child may be very expensive but if the child loses interest in that particular item, it will be a total waste of your hard-earned money.

You can use the same amount of money judiciously to make the house safer for the child. You can keep the electric items away from the child. You can change the electric wires of your gadgets if they have any defect.

You must have 6 month’s fund in your account

Your expenses will shoot up the moment child arrives in the houe. It is therefore necessary that you keep sufficient amount in your account. Approximately, your six months expenses must be with you. Keep in mind the fact that at present both of you may be earning but after the birth of the child one of you may be forced to leave the job, even if for a temporary period. So start making all the expenses in the house on a single salary only. This will save one salary in the house and will go a long way in making investments. However, if only one of you is an earning member then the saving may not be as much.

Look at the expenses in the following parts.

  • Childhood Expenses
  • Educational Expenses
  • Expenses for Marriage of the child

Select term insurance

Always choose term insurance. They are safe and cheap. For example if you invest Rs 50 lakh in term insurance, the monthly premium will be around Rs 1000 which can be paid easily. The child will be able to complete his/her studies in your income, but for higher education you need more money. For this you may go for long term policy, SIP, farma and equity fund. They are very good options. You can start with smaller amounts like with Rs 2000 or Rs 5000. But don’t forget to take a health plan also.

Many people are not able to think about their future plan. Lack of planning could be due to sheer neglect or carelessness on the part of the person concerned. The financial condition of the family must be seen before going for any investment so that there is no problem in future. But if you make proper planning from before the child is born then you can lead a happy and successful life.

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