Happy Mother’s Day to all the mothers out there! Am sure celebrations will be galore for all the new moms on the block. Congratulations!! This is a major milestone and a turning point in your lives. Along with happiness and celebration for the little one, comes a lot of responsibility including financial responsibility to provide for yourself and the young one too.
Let’s discuss some tips on how new mothers can balance their finances and plan for a secure financial future –
1. Start Saving:
If you are one of those who are used to spending your entire salary – please learn to save a part of your salary for your future and for your child. Ideally you should save around 25% of your take home salary – so that you can enjoy your spends and also build a nest egg. This saving can be channelized into ULIPs, Mutual Funds, New Pension Scheme. The investment will increase through the power of compounding and give you inflation beating returns in the future years.
2. Reduce Debts:
Managing debt is essential for financial stability. As a new mother, you may have additional expenses, such as medical bills or childcare costs. Reducing debt can help you free up money for other expenses and investments. Start by paying off high-interest debt, such as credit card balances. Plan to pay off your debt and stick to it.
3. Insurance is a Must:
Now that you are a parent, you should take a term insurance for securing your life for the little one. Medical insurance is also a must. We have seen in the last 3 years when covid was prevalent how medical expenses can create havoc to one’s finances apart from the physical and mental suffering.
4. Sovereign Gold Bonds Investments:
You can also invest in the Sovereign Gold Bonds for your gold investment, instead of buying gold jewelry (which has making charges and impurity risks). This investment is much safer and delivers a higher return as well giving you the upside of gold. The bonds are interest bearing as well and offer a tax-free return if held to maturity.
5. Diversify & Hedge Your Investments:
Invest in regulated entities and in different asset classes like equity and fixed income. Short term expenses should be parked in the fixed income assets while funds for the long term should be invested in equity.
The equity investments will help you for the higher education of your child later or your own pension requirements. Do not panic as markets are volatile but generally give a high return on a longer-term basis.
Rebalance your portfolio at regular intervals. If you are not very confident about investments, seek help from a professional advisor who will regularly advise you.
Do not be eager to book small profits- you will miss big returns as compounding of money helps grow the corpus. Keep your portfolio flexible with some amount of liquidity in the form of Fixed Deposits/short term liquid Mutual Funds or ULIPs as well. Maintain your investments neatly and share the same with your partner so that both are aware of the investments.
6. Inculcate Financial Discipline in Your Child as It Grows:
When your child is growing up, do inculcate the value of money in him / her- so that (s)he realizes that money is not only for enjoyment but also for saving and spending wisely.
7. Have Your Hobbies:
Being a mother is a beautiful feeling, but you should also balance your life with your hobbies – you should save for your bucket list/travel/any other hobbies by investing in Systematic Investment Plans (SIPs), which can be short term in nature.
8. Invest in Retirement:
Investing in retirement is essential for long-term financial stability. As a new mother, you may be focused on your child’s needs, but it’s important to plan for your future as well. Start by contributing to your employer-sponsored retirement plan.
If your employer does not offer a retirement plan, consider opening an PPF and New Pension Scheme Investing in retirement is an essential part of financial planning that can help new mothers ensure a secure financial future for themselves and their families. Setting aside money for your retirement kitty will help you in your sunset years.
Hope you these tips encourage you to embark on your investment journey this Mother’s Day. It will be your gift to yourself and your child.By securing your financial future, you will be able to enjoy motherhood in all its aspects. Since you will be happy and carefree, the child will also be at ease and will be able to get the attention he deserves from you in all aspects- mentally, physically, and financially.
