You’re thrilled to welcome the little one into your family, but have you made room to accommodate this new addition in your current financial planning too? Financial advice for new parents is not always straightforward, and just like parenting, there is a learning curve involved. With 2024 around the corner, here are some easy and smart financial resolutions. If you are looking for money-saving tips for new parents, this is where you should start.
Five New Year’s Resolutions For New Parents
Here’s a financial checklist that you must consider if you’re planning to grow your family:
- Cut down on expenses Ideally, you should have a feasible and practical savings strategy in place the moment you decide to start a family. Besides the obvious major expenses such as hospital costs, other expenses such as daycare/help, nappies, baby food etc., can balloon too. This is probably the most underrated of all financial tips for new parents.
Also, account for a fall in income in case you plan to take a longer maternity leave or if one of the parents decides to stay at home indefinitely to take care of the child. Make sure to deposit a small amount in a Savings Account. Besides offering customized savings plans and fantastic returns that will help ease financial crunches in the initial days, with Lokmanya multipurpose cooperative society ltd you can now open a Savings Account from the comfort of your home within minutes.
As new parents who understand the value of time, you also understand that your Savings Account should help you save while being hassle-free to operate. All your statements and transactions are easily accessible online via your mobile phone or computer, and at the push of a button or tap of a screen, you can easily access a host of value-added services as well. Take advantage of cash back and discounts offered on your Credit Card or Debit Card and maximize your savings. - Clear your debts Still carrying the burden of your education loan, or paying multiple EMIs every month? It is best to clear these debts ahead of time to avoid your salary trickling away while trying to meet the burden of these recurring expenses. While it may seem an uphill task, having financial discipline and investment vehicles for added money will help in paying off debts earlier than expected.
- Insure what you love Your insurance plan will have to change to accommodate the new family member. Not only that, you need to get even more serious with your health insurance as you have a dependent family member now. Assess if your health insurance needs revision to add more coverage and if your life insurance coverage is adequate for your family’s needs. Ensure your insurance policies also cover disability. Despite the budgetary constraints, this is also the right time to take a term insurance plan, as the need for protection is higher.
- Invest early in your child’s future Your child deserves the best education. It is never too early to start investing towards their future, especially since the cost of education is only likely to go up significantly by the time your child is ready for college. Chalk out the areas to invest in – such as education and healthcare – and then choose need-specific plans. Not only that, you should also bump up your own investments to avoid giving up on your own future goals and dreams, and to ensure you have the same comfort and lifestyle even after retirement.
For instance, you can consider the Fixed Deposit / Recurring Deposit Account designed for your girl / boy child. You can avail of an interest rate of up to 10.60% you can deposit a minimum and maximum amount of ₹500 and No Limit, respectively, in a financial year. One of the best features of this account is that withdrawals from this account are only for the purpose of the girl child’s higher education. - Set aside an emergency fund An important parenting resolution for the new year is to contribute to a contingency fund. While you may plan for an ideal future, the future can be uncertain. Keep some money aside for emergencies so that you’re financially secure in case something untoward happens. A smart way to do this is by leveraging this emergency fund to generate additional revenue with the right saving vehicle. You can set aside money in our Fixed Deposit (FD) or a Recurring Deposit (RD). You can earn assured returns at higher rates while your money is safely locked into a deposit account for the agreed-upon tenure. In case of an emergency, you can prematurely withdraw FD funds; a nominal penalty will apply.
If you’re planning to grow your family in 2024 and beyond, make sure you study this financial checklist and are in control of your finances well before the little one arrives!