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Financial Implications of Starting a Family

By Chanel Rick - Jul 7,2022
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As your family grows, so will your financial obligations – don’t let these expenditures sneak up on you. Pre-plan your finances to achieve life goals! 

In 2022, people prefer remaining out of traditional institutions like marriages to pursue personal goals and enjoy a consistent lifestyle. Though, that may cause you to neglect some crucial family planning necessities. Whether you tie the knot, raise a child or opt for a childless marriage – always pre-plan your finances. 

The implications of family planning involve factors like maternity, child-rearing and education, real estate, car, etc. With the costs of commodities and healthcare on a steady rise, a proactive approach toward plans is crucial. While there’s no foolproof solution to family planning challenges, you can take several measures to ensure fewer encounters with them. 

Financial Management & Family Planning 

In bustling countries like India, family planning is necessary for population control and reducing poverty. Without sufficient funds, your family will be at grave risk financially. It would compromise the futures of everyone involved, including your children and their education. Improper family planning has pushed many people to the brink of bankruptcy and sometimes beyond. 

A study (2018) on costs incurred by couples for child-rearing till age 17 estimated the total expenses to be approximately ₹42 lakhs. It only included lifestyle expenses, school fees and other miscellaneous expenses. The figure doesn’t represent the cost of higher education and marriage. 

Since then, the costs have significantly increased. To ensure your family lives a peaceful life, unbothered by the graveness of financial impediments, we recommend the following tips. 

●    Goals: Chart a list of goals, as per your priorities, to begin saving for them beforehand (e.g., first home) 

●    Budgeting: Boost your savings by creating a strict budget to curtail expenses and achieve your goals 

●    Investments: Choose investment products based on your life goals, like retirement corpus, child’s education, etc. 

●    Emergency Fund: Set aside a separate corpus to manage sudden financial obligations 

●    Insurance: Select a policy that ensures your family receives a sufficient sum insured in case of unfortunate accidents 

Raising a family is hard, don’t make it more difficult with poor financial management and excessive expenditures. It doesn’t necessarily mean living frugally – ensure that you live without compromising your budget. 

Financial Products for Family Planning 

Even the most invincible plans have faltered – so, how’s yours any different? Play out the odds and avoid falling into a vicious debt cycle with the following financial products. 

1. Maternity Insurance 

Before and after the pregnancy, mothers and newborns are susceptible to various risks that threaten their lives. A comprehensive maternity insurance plan covers all the treatment expenses related to the pregnancy. It includes medical examination fees, medicines, monthly tests, and reports. 

2. Health Insurance 

Aside from pre-planning expenses for pregnancies, consider the overall health conditions of your family members. Under this plan, you can add your spouse, dependent children and parents. It covers in-patient hospitalisations, pre-and-post hospitalisation costs, hospital cash, daycare treatment charges, etc. 

3. Car Insurance 

While planning exciting road trips or chauffeuring your children to school, a vehicle is imperative to cut costs. Car insurance protects your vehicle, yourself (driver), pillion rider and third parties. In case of a fatal accident, it provides your surviving dependants with a sum insured. Additionally, it covers post-accident repair charges. 

4. Home Loan 

Purchasing your first home is a pivotal milestone in your life while raising a young family. Between managing your livelihood and saving up for other goals, a home loan can help raise sufficient funds for a real estate investment. Furthermore, it provides you with tax deductions up to ₹1.5 lakhs under Section 80 EEA. 

5. Education Investment 

The rising inflation will affect your finances with children’s education increasing your outgoing expenditures. In case of your demise, ensure your children remain financially secure by making smart investments. Opt for investment instruments like PPF for long-term compounding benefits and Gold ETFs for their convenience of storage and low chances of theft. 

Back up your finances with the best insurance and investment products to ensure a bright future for your family. Find suitable financial products for your upcoming life goals on Bajaj MARKETS today!

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