Anyone can be a father, but it takes a lot to become a "dad"
Fatherhood is nature's biggest gift, which you can only realise when it happens to you. It's the utmost joy to hear the word "daddy" from your child. But this divine joy comes with the great responsibility to raise them, fund their education, and get them settled in their lives.
When you are a bachelor, you tend to focus on your own things: travelling, parties , shopping, etc. But as soon as you get married...you plan to have a child within 2-3 years of your marriage, in most cases.
In this period, you can cut down on your bachelorhood things, and start focusing on family, you can avoid eating out many times, unnecessary shopping, parties, etc.; and utilise this fund, making it a decent one till your child's birth. which will keep you worry free so you can focus on your spouse's and your child's health during your wife's pregnancy.
Taking insurance coverage that covers the full delivery expense with pre- and post delivery expenses will be very essential. which will save you a lot of money that would have been spent on your wife's delivery.
Now, the main responsibility starts hereon: make an estimate of your child's upbringing expenses, like food, health checkups, school admissions, university education, etc. If it is around INR 20 lakhs ( 25000 USD ).. you can go for an endowment policy that gives you good returns with tax benefits and gives you premiums periodically that can cater to your child's needs at different stages.
Or you can make different SIPs that give good returns with low risk for different purposes of your child's expenses.
This way, you need not compromise on your child's upbringing and education because of funds, you would be prepared and less worried about discharging your fatherhood responsibilities.
This financial provision should not impact your retirement planning. Otherwise, you would be more stressed out when you were not able to work. Hence, retirement planning should go hand in hand with financial planning for your child.
Six Tips which you can do for your child's better future provision.
1) You can open a savings account in your child's name, in which you can save some amount every month. which will grow up with your child.
2) Teach your child the importance of saving and investing so that he/she will benefit from knowledge of it at an early stage of life.
3) Don't take any big financial decisions that will hamper your family life. Take very systematic and calculative financial decisions to keep your spouse and children's futures secure.
4) You can take advantage of compounding for your child by investing in equity funds. But the investment terms should be long to gain maximum returns for your child. If CSGR is 15% per annum on average, which is normal, then on 15-20 years of investment, your investment turns into a big corpus for your child.
5) Review all investment plans regarding your child against inflation and upgrade whenever it is necessary or as suggested by your financial planner.
6) Take term life insurance for a sufficient amount, say INR 1 crs ( 125000 USD) , which will work like your financial replica, when, unfortunately, you are no more. The insurance coverage amount will provide your spouse and children with the same lifestyle that you would love to provide for your family.
Financial planning is an important aspect of your child's upbringing and will help you reduce the financial burden on you and discharge your responsibilities for their upbringing with ease. which will transform you from just being a father to a loving dad for your child.
Happy Parenting with easy Tips to follow..!!
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