This is a very exciting but uncertain time. There are several financial considerations that few people are aware of until the 8th month. You need to consider a number of financial issues very early in the process to be prepared for this momentous event:
Plan for delivery expenses:
- Have you planned how you will finance delivery expenses such as the hospital stay or emergency operations?
- Will you have to buy a second car, extend your home or even move to a bigger home soon?
- Are you set up to do your banking from home if you can’t find a baby sitter?
- Are you prepared to sacrifice to give your child a clear advantage in the future?
- If something were to happen to you, would your family have the finances to pay hospital bills or maintain their standard of living?
We know that there are many issues surrounding childbirth for which you and your loved ones will need to prepare. We certainly cannot say that having the baby is the easy part, especially for the mother, but there are other issues worth considering such as emergency operations which can be very costly.
- Save for this event - this is best done through either forced or automatic savings. Ensure that your funds are easily accessible through debit or credit cards in the event of an emergency.
- Pre-qualify yourself for credit – depending on the situation, you may need to take a loan for some of these expenses. Meet with us to determine how much you can borrow and the procedure to get the funds as quickly as possible. This way, if you find yourself in an emergency situation, you will know exactly how to proceed.
- Automatic Savings Plan to a high interest yielding savings account
- Debit and Credit Cards;
- Chequing Account with overdraft facilities
- Financing options
Operations, pediatrician visits and private medical institutions can be very costly. You will have almost no time to consider the financial side of childbirth once the little one decides to push his/her way into the world. So, as soon as you find out that you’re expecting, you need to develop a financial plan which considers all the expenses that would or could arise.
We all know that as kids get older, they start to argue over territory, space and privacy; a 7 pound baby might require an entirely new home, a whole extra room, or a bigger/safer car.
Plan for new expenses:
As your family grows you may have to consider new expenses such as a new home and/or a bigger car by exploring your financing options such as loans and mortgages. Contact us today to discuss the financial side of these decisions so we can help make the transition easier.
Create more time for yourself: Sign up for convenient alternative banking channels such as Debit Cards, Telephone and Internet Banking (where available).
Save for child related expenses:
Open an automatic savings plan for annual expenses and emergency funds (doctor's and dentist's visit, school fees etc.) and ensure that you have easy access to these funds through ATM or cheques in the event of emergencies. You should estimate the cost of these recurring expenses and save for them monthly.
Protect your family
If anything happens to you, your family should know where to turn to finance expenses and maintain their standard of living. You should:
- Set up an Automatic Savings Plan to build your 3-month salary cushion
- Set up insurance policies to protect valuable assets such your home, car, furniture, appliances, jewelry, estate etc.
- Take out a Life Insurance Policy with Critical illness Insurance to ensure continued well being of family
- Start a Funeral Protection Plan to cover final expenses and ease the burden on your family in the event of death
- Set up a Term Life Insurance Policy to automatically liquidate debt in the event of death
- Protect your estate with Will Preparation and Trust Agreements
As a parent, you have to teach your children proper financial habits, reward positive behaviours and finance their education, all with the goal of preparing them to confidently face the situations you now face as an adult.
- Are you encouraging your child to adopt proper financial habits from young?
- Do you know what your child spends his/her money on?
- Do you reward your child when he/she demonstrates positive behaviours?
- Are you leading by example, demonstrating to your child proper money management techniques?
- Are your kids equipped with the right educational tools so they are on a level playing field with other kids?
By the time your child reaches 20 years old, he/she can have significant cash holdings which can be used for education, to buy land or anything else you and your child decide at that time. However, to make this a reality, you should start saving immediately. Encourage proper savings habits. The earlier a child learns basic money management techniques, the better prepared he/she would be to successfully handle their own affairs when the time comes. Start by simply opening an account and encouraging proper savings and spending habits. Make paying allowance and monitoring your child’s financial behaviour easy.
- Set up a Standing Order to automatically debit your salary account and credit your child’s account with their weekly/ monthly allowance and monitor his/her spending patterns through bank statements.
- Reward your child for all accomplishments to reinforce positive behaviours such as commendable performances in exams, sports, community activities etc. or even reaching certain savings goals or volunteering to do household chores. Many people use monetary rewards for this, however, instead of giving them cash which they may spend immediately, you can credit an account and build their savings instead.
- When your kids receive monetary awards/gifts, encourage them to save a portion of it instead of spending it all.
- Equip them with the right tools. A computer is almost a necessity in today’s fast pace learning environment. In addition to back to school expenses, lessons and other fees (extra-curricular) you can apply for a loan to purchase computers, printers, learning software etc. for your kids.