- By Perfecttax
Whether you are a newlywed couple or parents-to-be, financial planning at a very early age has been mandatory, thanks to the current lifestyle. In addition to creating a personal financial plan, building and preserving a family wealth fund to utilize for emergencies and family goals requires a high-level of commitment.
At Perfect Tax and Finance, we provide personal financial planning advice - coupled with one-on-one guidance to develop a comprehensive that suits your personal and family needs. We’ve compiled a few tips for new parents-to-be to create a suitable financial plan that helps manage risk and emergencies, promote long-term savings and ensures the growth and longevity of your wealth.
Tip #1 Create a Distributed Savings Plan
It is a common human tendency to break down the savings plan whenever there is a need. As much as your personal savings should be helpful at times of emergency, it is also essential to set a limit as to how much of your escrow savings can you use up at such times.
If you are using a major part of your savings to procure luxuries, then you are on the wrong path. To overcome this tendency, make it a habit to distribute your savings towards different categories - child’s education, vacation plan, home purchase, four-wheeler purchase and others. When you do this, you know which specific part of your savings can be redeemed when needed.
Tip #2 Save first and Spend the rest
Parenting begins the moment you become pregnant so it is essential to start saving for the child’s future from the beginning with a well-defined plan in mind. Pregnancy and Childbirth, in addition to a lot of happiness, bring in a bunch of additional expenses such as medical charges, lifestyle expenses and much more. To be prepared for these expenses is the first step to saving for your little one.
Tip #3 Create an Emergency Fund
It is highly recommended that you set up a contingency fund keeping in mind the potential financial risks in case of any unavoidable death or disability in the family. Plans such as Health, Home, Life or Term Insurance and other long-term insurance payments that support your family during emergencies can be a great asset during times of crisis.
Tip #4 Choose your Priorities
As much as you wish to create an amazing life for your child, it is also essential to set your limits and choose your priorities. The biggest investment you can make for your child’s future is their education, hence it is essential to make it your first priority for savings. Create a child’s education fund and start investing since Day 1.
If you are unsure where to begin, Perfect Tax and Finance helps accurately estimate the amount of money you'll need, analyze your assets, review estimated shortfalls and consider general alternatives and strategies to help address these potential shortfalls; in order to develop an optimal savings plan given your financial situation and risk tolerance.