As a parent, one of the most important things for you is to be able to secure your child’s future. It’s probably what keeps you up at night and is a theme that’s always playing on your mind. That’s completely natural. As a parent, you are accustomed to worrying. However, while it’s important to know that worry comes with being a parent, it’s also important to know that you can eliminate some of your worries with ease. By planning for your child’s future and trying your best to account for different possible scenarios, you can make sure that nothing untoward happens in the future. Here are a few mistakes to avoid while planning for the same:
4 Mistakes you are making in financial planning for your child’s future
1. Thinking you’ve got time
You’ve probably already heard multiple relatives tell you that before you know it, your child will be an adult with his/her own life. Of course, the speed is a bit of an exaggeration but there is certainly some truth to it. Time flies by quickly and when it comes to financial planning, every second counts. Don’t put off investing in financial instruments for your child’s future when they are older. Think long term and begin investing as soon as you can. Remember, the more time you give your funds, the more they can grow, thereby being more beneficial to you and your child. Start now and you may even end up with surplus funds!
2. Not accounting for healthcare
No parent wants to even imagine anything bad happening to their children. To be honest, it’s a dark road to down. You’ve probably got enough legitimate worries on your plate without adding a series of what-ifs to the equation. However, not accounting for health care can be a huge mistake. Even if you don’t want to think of your child going through health problems, you must account for them so that if something unfortunate happens, you can ensure that you are able to provide the best care possible. Taking into account your family’s medical history while doing so can also be a huge help if the situation arises.
3. Not setting aside funds for milestones
Your child is going to grow up dreaming his/her own dreams. Sometimes, these dreams require higher studies that can be fairly costly. No matter how expensive it may be, you want to be in a position where you don’t have to deny their dreams (and nor do you want to end up taking out huge loans and paying through your nose). By setting up high ROI funds such as ULIPs, you can account for these dreams or use these funds as and when required once your child grows up. If nothing else, it can be a good trust fund for them to be able to choose their career without worrying about money right at the beginning. It is a good way to allow them space to discover their talents in more volatile career options such as the arts.
4. Not having separate plans for different children
If you have more than one child, you certainly don’t want to be in a position where you must choose between the two in terms of what you can provide for them. It is always beneficial to have different funds set aside for different children so that no matter what their dreams and hopes are, they can pursue them without worrying about the financial burden that falls on you. It is a good way to show your children that they are loved equally and have equal opportunities in life.