Brace for the new arrival

The arrival of a newborn brings happiness and is a reason to celebrate. Being a parent is a ‘dream come true’ for all of us and all our troubles take a backstage. Parenting a child is however not easy, as it demands a lot of planning ahead and responsibility.

One question is sure to cross every parent’s mind “Can we take good care of our child?”

The ground reality is that you need to be emotionally as well as financially prepared, to take the job of being a parent. On the financial front you would have to ensure that you have sufficient finances of both near and future expenses – right from their birth till the time the become independent.

The planning begins well before you decide to become a parent. And with recession, pay cuts, and job retrenchment looming large; the need to plan the future of your little one, way in advance, gets compounded. Mentioned below are six financial tips that will assist you to help you fulfill your parenting responsibilities, with ease.

• Get rid of your debt: Debt repayment consumes a large share of your monthly income. Since your monthly expenditure will increase substantially with the arrival of the little one, it is wise to pay of your debt as quickly as possible.

• Start saving: It costs nearly $ 5,000 to $15,000, in medical expenses, for a child birth. Since the money involved is substantial, it would be wise to start putting aside money early on. It will help you to save sufficient money towards the cost of medical expenses.

• Avail scheme benefits: There are various childcare benefit and support schemes run by local and central governments. These schemes are intended to address the interest of both parents and the child. Be sure to utilize such benefits.

• Stretch your income: Child tax credit is another benefit that most governments provide to parents. Do not forget to claim the applicable tax credits

• Buy Disability/Life insurance: To secure the future of your child, in the event of any unforeseen eventualities, it is important that you buy life insurance. You have to plan the insured sum to match the financial needs of your child, in case something happens to you or your spouse.

• Save for the future: It is never too early to start saving for your child’s future. Start investing in plans specially designed for children. Not only do they give added benefits, but also have a higher return. Think of the future and save for their schooling, college education, etc.

As parents, you need to accentuate on striking a balance between short and long term financial needs. And don’t forget to get your little one a piggy bank – every little helps!

This entry was posted on Wednesday, February 11th, 2009 and is filed under money management, personal finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or Trackback from your own site.