Having a newborn baby is extremely exciting. As a new parent, you probably have many hopes and dreams for your new son or daughter and can`t wait to have this special little person in your life. However, you also need to be aware of the fact that there are significant costs associated with having a child. In some estimates, parents will spend $250,000 or more on raising a child, without even counting college costs. Being financially prepared for this undertaking is a huge endeavor and you should begin financial planning as soon as you find out you are expecting, if not before.
Once you have kids, you will need to adjust your budget in order to account for the added expenses. Diapers are one cost you will need to factor in and you should think carefully about whether you plan to use cloth diapers or disposable diapers. Don`t count on cloth diapers being a big saving though, as the math often works out that cloth and disposable are about the same, when you consider the cost of buying the cloth diapers and paying for the laundering.
In addition to diapers, you will need to consider the cost of food, toys, daycare and baby expenses. Think about how you can trim your budget to make up for these added expenses. With a new baby, for example, you may not be eating out as much, so you may be able to slash your spending on entertainment and dining out.
Not all health insurance companies in India will allow coverage for a newborn baby from day one. There are a few that do, however, so you should contact them to determine what the cost of insurance is. You want to make sure your infant is appropriately covered in case something should go wrong, as the cost of medical care can be very expensive.
You should also think about starting to save money for your child`s college education as soon as you can. Many people will want to give gifts to the new baby and having them contribute to an education account can be a great way to get your child started off on the right foot.
You should be contributing to your child`s college fund yourself as much as possible, of course. There are a number of different investment options to consider. Of course, you can just open a flexi bank account, which is on offer from most banks in India. These pay a higher interest rate than standard savings accounts but also offer flexibility in withdrawals.
However, since you will not need the money for a while, as your child`s education is far into the future, you should consider investing in a special investment account that will allow your money to grow more than it can in a bank. In the investment account, you will have a choice of what to invest in.
Stocks can provide the greatest potential gains but there is also great risk associated with them, as the company you are buying stocks in can suffer a decline. Since your child won`t need their education fund for a while, putting some of the money in stocks might be OK. You will have time to weather market downturns before you take the money out. Just be sure you choose established companies to invest in.
Another safer investment alternative is mutual funds. A mutual fund is an investment in a number of different stocks or investments that a fund manager determines are an appropriate mix. This way, if one item goes down, you won`t lose all of the money you invested, as would be the case with individual stocks.
Consider looking into different rewards cards or good credit card offers like those from Virgin credit card to help make sure you have money left over to save.
Setting a Budget
Once you have kids, you will need to adjust your budget in order to account for the added expenses. Diapers are one cost you will need to factor in and you should think carefully about whether you plan to use cloth diapers or disposable diapers. Don`t count on cloth diapers being a big saving though, as the math often works out that cloth and disposable are about the same, when you consider the cost of buying the cloth diapers and paying for the laundering.
In addition to diapers, you will need to consider the cost of food, toys, daycare and baby expenses. Think about how you can trim your budget to make up for these added expenses. With a new baby, for example, you may not be eating out as much, so you may be able to slash your spending on entertainment and dining out.
Health Insurance
Not all health insurance companies in India will allow coverage for a newborn baby from day one. There are a few that do, however, so you should contact them to determine what the cost of insurance is. You want to make sure your infant is appropriately covered in case something should go wrong, as the cost of medical care can be very expensive.
Investing
You should also think about starting to save money for your child`s college education as soon as you can. Many people will want to give gifts to the new baby and having them contribute to an education account can be a great way to get your child started off on the right foot.
You should be contributing to your child`s college fund yourself as much as possible, of course. There are a number of different investment options to consider. Of course, you can just open a flexi bank account, which is on offer from most banks in India. These pay a higher interest rate than standard savings accounts but also offer flexibility in withdrawals.
However, since you will not need the money for a while, as your child`s education is far into the future, you should consider investing in a special investment account that will allow your money to grow more than it can in a bank. In the investment account, you will have a choice of what to invest in.
Stocks can provide the greatest potential gains but there is also great risk associated with them, as the company you are buying stocks in can suffer a decline. Since your child won`t need their education fund for a while, putting some of the money in stocks might be OK. You will have time to weather market downturns before you take the money out. Just be sure you choose established companies to invest in.
Another safer investment alternative is mutual funds. A mutual fund is an investment in a number of different stocks or investments that a fund manager determines are an appropriate mix. This way, if one item goes down, you won`t lose all of the money you invested, as would be the case with individual stocks.
Consider looking into different rewards cards or good credit card offers like those from Virgin credit card to help make sure you have money left over to save.
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