Money makes the world go around – doesn’t it? No matter how successful you are or how well you are earning, your budget may be in for a shock, once you have a child with costs of supplies, doctor visits and education.
As a parent, we are often guilty of going overboard with shopping, outing, gifts or foods – don’t we all want the best of everything for our little ones?
Making the right money management decisions now will set you up for a financial success tomorrow. Here are a few smart tips to manage finances as a parent:
- Identify your financial goals – With a new person at home, as providers, it is very important to start thinking how do you want to park your money for your kids’ education, medical insurances, assets, holiday and contingency funds. Have a regular discussion around this with your partner/ spouse.
- Keep funding your retirement – When a child arrives, it’s easy to forget your financial goals with this huge responsibility. Stay on top of your retirement plans so your child doesn’t have to support you in old age.
- Save for higher education – With college tuition fee going up each year, imagine how unaffordable it can get when your child is college ready? It is ideal to start putting aside a decent amount every month when your child arrives, which can pay for the college admission.
- Reassess your insurance coverage – Buy, if you don’t have one and top your existing coverage. In case (god forbid!), you or your spouse pass away, the remaining parent would have enough to cover raising a child.
And the biggest secret of all is communication. Talk about money with your child and spouse. Explain why you spend less than you earn and why you’re saving for retirement. Explain some of the spending options you have and why that means you can’t afford a gadget or a fancy vacation every year. Talk to them with maturity and grace, as if they were an adult, and they’ll listen.
Remember, money may not be everything, but it is next to everything. So be wise!