Money Management Tips For A New Father
To say becoming a father for the very first time is overwhelming is an understatement. A child brings a bundle of joy and also a myriad of additional responsibilities.
Raising a child today is expensive and will be solely dependent on you for years to come. Staying on top of your finances from the get-go will make all the difference in securing your family’s future.
This blog will give you seven essential tips to help you get started on shoring up your finances as a new dad.
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1. Resist the Urge To Splurge – Spend Wisely
As a new father, the urge to splurge and give your firstborn the best of everything is understandable. Prioritize your expenditure at this stage. You will have to account for medicines, visits to the paediatrician, diapers, baby care products, and so on over and above your existing monthly expenses.
When it comes to your child, don’t shy away from hand-me-downs or spend on the most expensive of things. Remember, for the first few years, kids outgrow everything rather quickly, nor do they care about the best brands. Spend wisely.
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2. Rework Your Rainy Day Fund
Having money set aside for emergencies is one of the foundations for being financially secure. If you don’t have one yet, now is the time to do so.
Things can happen out of the blue, and with a child in the picture, it is all the more important to have an emergency fund to ensure you can sustain your family through bad times.
3. Get Insured
As a new dad, the risk of losing a steady source of income or a heavy financial loss can be a massive blow to your family, both emotionally and financially. This is why having adequate insurance is one of the most essential pieces of advice you should take away from this blog. You should work towards having three insurance policies:
- Health insurance will cover you, your spouse, and your child (add the little one to your policy as soon as your policy allows) for any health-related expenses.
- Accident/Disability Insurance will guarantee money keeps coming in the event of a severe disability.
- Term Insurance ensures your family is financially secure even if you are not here to provide for them.
Remember, the younger you are, the lower your premiums will be.
Read: Best investment plan for monthly income in India
Read: Best investment plan for monthly income
4. Start Investing in Higher Education
School and college fees are rising exponentially. Please do not make the mistake of pushing saving for them for a later date by thinking that school and college are a long way off.
Start investing now, even if it is just in small amounts. Let the power of compounding do its magic and make your money work for you. Do your research and take advice from financial experts on how to work on that college fund.
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5. Have A Will In Place
A will is a sure-shot way to protect your child’s future in the event of your untimely demise. It will avoid any unfounded claims to your assets and ensure that your spouse and child have a secure future.
6. Pay Attention To Your Financial Security
While there is no question that your child is your first priority, it is essential to keep a close watch on your financial security, too. Having a solid retirement fund and investments in place will go a long way in having a stress-free life in your later years.
7. Rework Your Monthly Budget
Now that you have a clearer picture of a brighter financial future, rework your monthly budget to account for as many of the points mentioned above. Don’t stress out if you don’t have the funds to accommodate all of the above. Rework things the moment you get that bonus or your next raise.
Get Started Right Away!
Becoming a father is a life-changing event. It’s essential to be prepared for the financial challenges that come with it, and these seven tips are a great starting point toward that goal.
In the future, you’ll thank yourself for having managed your money smartly and started investing. Just remember, start small, but start now.
1. How much money should I save for emergencies?
Experts suggest that six months’ worth to cover all your monthly expenses should be enough. But there is no harm in setting a higher target if possible. The more you can save up, the better.
2. What are the good investment schemes to start off with in India?
There are a number of brilliant investment schemes available in India that can help you reach your financial goals. Public Provident Fund, Employee Provident Fund, and Sukanya Samriddhi Yojana are a few tax-free options to start with.