Money is a leading cause of conflict among couples and can create significant stress for adults, particularly when they become parents. Ways to save for the future of your baby can be overwhelming, especially for new parents with limited knowledge about financial matters. When my son was born, my partner and I felt lost in the sea of options offered by the financial market. Unfortunately, we couldn’t find any reliable financial products specifically designed for children’s futures. The more we researched online, the more confused we became.
It’s common for new parents to feel overwhelmed when trying to save for their child’s future. The internet, while a valuable resource, can also add to the confusion with conflicting information and complex terminology. However, don’t let this discourage you. Seek guidance from a trusted financial advisor to help navigate through the options and make informed decisions based on your circumstances. Remember, building a secure financial future for your child requires patience, research, and seeking assistance when needed.
It was then that I decided that it was better to K.I.S.S. – Keep It Simple and Stress-free! And I’m sure you’d like to do the same, so here are some simple, stress-free ways to save for your baby’s future.
Stress-Free Ways to Save For The Future Of Your Baby
Decide how much to Save
The first step is to decide how much corpus a child’s wedding or education will cost in the future. While this may sound difficult, there are plenty of tools to help you, like this tool from HDFC. Tools like these can give you a decent idea on how much you need to invest every month to save for the future of your baby.
For example, if the total amount required today is Rs 10,00,000 ( I entered my child’s age as 2 years) then at the end of 16 years I would require Rs 21,82,875 with an inflation rate of 5% (assumed). So, to grow a corpus of Rs 21,82,875 after 16 years, the monthly investment required is Rs 7,522.
How to invest every month to get assured returns?
I am not a great fan of all the endowment policies floating around, as though many of them boast of assured returns, they won’t be able to compete with inflation and market interest rates. The best way to save for the future of your baby would be to invest in debt and equity equally. This will give your money a chance to grow over time while still being relatively safe.
Debt instruments are our traditional, ‘solid’ investments like:
- Recurring Deposits
- Sukanya Samiriddhi Scheme for Girls
Equity refers to shares and mutual funds. While direct equity in the form of shares is risky, you can always go for Mutual Funds, as they give good returns for long term investment. You can do this through SIPs (Systematic Investment Plan) every month for a period of 10-15 years. If you are market savvy then you can choose to invest in Mutual Funds yourself or else you can avail the advice of financial consultants who can manage the portfolio for you and check the fund performance periodically.
As Indian women, no investment plan is complete without gold! However, instead of investing in direct gold, you can always buy Gold ETFs which can be done as monthly investments too.
All this is general information to make things a little easier for your financial planning. I am not a financial expert so please pardon my ignorance if I’ve mentioned something wrong. Also, it’s best to hire a reliable financial planner to create the perfect financial portfolio for your needs. Happy Investing!
PS – As a March Budget offer, we have recently launched our Trial Packs which come in 100 gm packs so that you can let your baby taste different flavors without worrying about the cost! We have trial packs in different options like Millet Sathumavu, Sprouted Ragi , Banana Rice Cereal and more. You have a lot to choose from, so shop now!