A financial survival guide for parents struggling to keep up

Parenthood brings a lot of happiness and responsibilities. As the little munchkin grows, we want to give them the best, perhaps everything that we didn’t have in our childhood-the best school, branded toys and accessories, higher education (most likely in a foreign university) and want them to have a flourishing career ahead. Plus, we want to accomplish our other life goals like buying a new home, going on a dream holiday, a new car, and more.

Given the exorbitant cost of living, the road to fulfilling all our goals (including the little ones) is not easy unless planned well. Thankfully, the process is simple and can help reduce expenses, if begun early.

Here’s a step-by-step financial survival guide to help you:

Prioritize your goals: Aside from your child’s education, list down your other goals in order of your priorities. Strike a balance between needs and wants. Maintain a spreadsheet for your monthly expenses. Keep a check on your spending.

Bifurcate your expenses into essential and non-essential expenses. See if it is possible to restrict some of the non-essential expenses.

Invest toward child-specific goals: Target an amount for your child’s education and be disciplined toward achieving the goal. Invest savings in a way that earns returns, preferably, more than the rate of inflation to combat the rising prices.

Plan and Invest early: Early bird gets the most worms. The sooner you start planning, the better it would be.

For example, if your kid is 3 years and the higher education cost today is Rs. 5 lakhs, let’s see how much it would cost when your child turns 18.

When you invest early, you can invest a smaller amount. In this example, if you start investing Rs5,000/month toward your child’s higher education , with a return of 10%, you’ll accumulate close to Rs21 lakh by the time you time your child is 18 years old. However, if you start saving when your child is 10 years, you will need to invest Rs.11, 365 every month to create a Rs. 21 lakh corpus, considering 10% returns.

Keep away from impulsive buying: As far as possible, keep away from impulsive buying. You may want to delete apps on your smartphone that entice your purchasing instincts.

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