Securing your children's future: An actionable plan/checklist
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For new parents who have just added a new member to their family, and for couples contemplating having a child or two, there are many things that need careful planning. If you are also in the same phase in life, you will no doubt agree that securing your children’s future is top priority for you and your spouse.

The earlier you start planning for this, the better your children’s future will be. After all, there are several things that you need to save up for, like your children’s everyday needs, their higher education and college course, their wedding, and any other goals they may have. As a young parent or as a soon-to-be mother or father, the years ahead can seem overwhelming.

Fortunately, with a little bit of concrete planning, things get much easier. Here is an actionable checklist that you can use as a guideline to create a solid plan for your children’s future.

1. List out the short-term and long-term goals for your children

The first step to protecting your children’s future is to identify the goals that this future will entail. This makes it easier to plan for the milestones coming up in the future. You also need to categorize the goals as long-term and short-term targets, so it becomes easier to create a financial plan for each goal as needed.

Some common short-term goals may include saving up for your children’s school fees next year or taking them on a vacation during the holidays. Long-term goals, on the other hand, may be building a corpus for their college education or their wedding.

2.       Start investing as early as possible

Once you know which goals you need to prepare for financially, the next step is to start investing for them. The earlier you start to invest, the better it will be for you and your children. This is because the advantage of compounding will allow your money to grow more over time.

It is prudent to pair short-term investment options with short-term goals, and long-term investment vehicles with long-term goals. Aligning the goal’s time horizon with the investment’s time horizon is crucial. An SIP can be ideal for long-term goals, since it gives you the dual advantage of compounding and rupee cost averaging.

3.       Have an emergency fund in place

An emergency fund is an important financial milestone to check off your list. It ensures that your savings and investments for your children’s future remain intact, even in case of any major unforeseen expenses like a medical emergency in your family or a costly home repair on account of heavy rains.

Without an emergency fund, you will have to break into your investments to fund these costs. Experts recommend having a contingency fund that is at least six times your monthly income. If your budget allows for it, you can always create a bigger corpus for such unforeseen scenarios.

4.       Protect your children’s future using life insurance

When it comes to securing your children’s future, life insurance is a crucial piece of the puzzle. In case something untoward happens to you and/or your spouse, your children may find themselves financially unsupported, in addition to the emotional pain of losing one or both parents. Life insurance can ensure that despite unforeseen circumstances, your children have a financial safety net in place.

A life cover essentially offers financial payouts to the nominee in case of the policyholder’s demise. So, by nominating your children as beneficiaries, you can secure their future with the payouts from the policy.

5.       Purchase health insurance for your family

Medical costs are on the rise, and a medical emergency can crop up at any time. Even a seemingly minor procedure or medical treatment can cost several thousands of rupees. A health insurance plan will ensure that you are financially prepared to meet the cost of such healthcare requirements as and when they arise, without having to tap into your savings.

This is because a health insurance plan essentially covers the cost of medical treatments, hospitalization, pre and post hospitalization costs and more. It may be more prudent to opt for a family floater health insurance plan, which covers yourself, your spouse and your children.

6.       Prepare a will

A last will and testament is a very important document, since it outlines how your assets will be passed on to your children in case of your demise. However, many parents put off preparing a will. The absence of a will can lead to a lot of inconvenience for your children, especially if you have assets like land, property, stocks, or bonds in your name. So, ensure that you get a will prepared and registered promptly.

7.       Assign your children as your nominees

Whatever investments you may have — right from fixed deposits and equity shares to insurance and post office investment schemes — you need to assign a nominee to make the transfer of the asset easier. As and when you have children, you can update the nomination field in your investments to ensure that they can inherit the asset easily in your absence.

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This is merely an illustrative checklist. You can add more items to your plan, based on what your children may require financially in the future. You need not take all these steps at once, but the sooner you do, the better it is for your kids. Also, remember that it is advisable to revisit your plan occasionally and ensure that it is still strong enough to protect your children in your absence.

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