Being a parent is a very rewarding experience. There is nothing more endearing than to see your children grow up into healthy, thriving, and responsible individuals. As you watch them grow up, you cannot help it but feel sentimental as they complete your life in so many ways. But then again, it is not all too easy to be a parent. In addition to raising your children well, you need to make sure that their basic needs are covered. This is why planning carefully before bringing them out into the world is a practical thing to do. You should make it a priority to prepare for them, just like how you plan for your marriage and other major investments in life. In an expensive city such as Singapore, family and financial planning should go hand in hand to make sure your loved ones’ future is secured. After all, there is nothing more stressful than dealing with additional expenses and not being prepared for these. Sure, a baby can brighten up your home in an instant, but at the same time, there are expenses you need to take care of. Diapers, daycare fees, toys, clothes, and what-nots all cost money. So, if you are not ready for these, then you are certainly up for a big surprise – and perhaps lots of sleepless nights and bouts of stress.
Securing Your Finances for the Family
If you have been contemplating on becoming a new parent, or perhaps you are planning on adding a new member of the family, these practical tips should help you prepare your finances.
1. Secure your employment and source of income
Every practical parent should understand that your job has a massive impact on how your family life will turn out. The more stable your employment is, the more comfortable and less stressful your life will be in terms of your finances. There is something relieving about knowing that you have a steady paycheck to expect each month, and that you have nothing to worry about not being able to cover your family’s expenses.
On the other hand, some people enjoy simply doing odd jobs with fluctuating income every month. While this may seem ideal and favorable for a young bachelor, this is not exactly the best way to go if you are expecting a baby in the family. The growing expenses you will have in the near future require much attention, and this means having a steady income for whatever these may be. It is very expensive to have a baby. There are basic needs to be met, and with the addition of your little one’s medical expenses. So, before you decide to have another child or two, make it a point to secure your employment first. Your goal should be to give your family the best they deserve – and this means providing all their needs while saving some money along the way.
2. Pay off your debts
It is one thing to have insufficient money coming in each month. But it’s another issue to deal with if you currently have a ton of debts and personal loans from licensed money lender that are still waiting to be paid off for years to come. The truth is that your expenses are already coming your way way before the baby comes home to the family. You may consider buying baby supplies early before the arrival of the baby, along with additional furniture or renovation of the extra room for your little tot’s nursery. But the problem sets in when you have existing debts. In addition to your debt payments, there are definitely expenses to come along, which you may not even be expecting. Just imagine how tough it would be to carry a credit card balance of $5000 or more, which accumulates an interest rate of 15 percent or maybe higher. This would mean paying $790 a month on your interest for over a year. Yet, if you decide to pay only the minimum amount, this would mean a higher interest payment that will take a longer time to fully pay the debt.
This is why the goal must be to repay your debts the soonest possible. The earlier you can get off your debts, the less stressful things will be for you once your little bundle of joy comes. Then, you can enjoy being a parent and give more time and attention to your child.
3. Increase your daily budget
Having a budget is quite like having a road map – it leads you to your objectives and keep you on track of things. This is why every person who is hoping to become a parent must set a budget for the family, as well as a personal budget. This would mean including extra things to your budget that your baby is bound to need such as medical costs, childcare expenses, baby formula, groceries, and diapers. There are also miscellaneous items you should take care of, which you need to include in your budget.
So, before you take your card out of your wallet to purchase another pair of expensive basketball shoes just to add to your dozens of other shoes, it may be time to hold back a little. You need to be more practical with your expenses and not give in to the temptation to shop for unnecessary items that will ruin your budget.
4. Consider buying extra insurance coverage
Perhaps you have an existing insurance coverage, which is a smart thing to get whether you are a family man or not. But with the coming of a new baby, updating your insurance coverage is essential to make sure your child is included in it. The additional member of the family can benefit from having insurance, so you should make sure that tiny tot is not left out. This will give you the peace of mind that in the event something happens to you, there are no worries or anxieties on your family because their needs are all covered.
5. Set up your emergency fund
You will never know when tough times will come your way, so it is always best to be prepared way before these things happen. This means that having an emergency fund is an important aspect of every person’s life, particularly those who are hoping to become a new parent. You would not want to take out loans just to cover for these emergency expenses because it means having extra bills to pay each month. If you are serious about having a baby, begin establishing an emergency fund. You may opt for a fixed deposit account or a high-interest savings account where you can place the fund, so it can grow over time.
6. Begin saving for your child’s college education
It is never cheap to send a child to school. The expenses even hike up when your child enters college, as tertiary education is indeed very costly. There is also that 5 percent average inflation in school fees, so you have to factor that in when you prepare for your child’s college education fund. With this in mind, you have to start saving for your little one’s college education even before he or she is born. Even if you think you can only fund up to 50 percent of the total fees for your child’s college education, you can spare him or her from a massive college loan that will take years to pay off. The earlier you begin saving for your child’s needs, the more prepared and the less stressed you will be once the time comes for your little one to join the family. Then, you can focus more on the excitement of becoming a new parent while providing for your child’s every need. These tips should help you savor the rewarding experience of parenthood as you give your family all that they need.