A Young Parent’s Guide to Financial Planning

Congratulations, you have reached another milestone in life, now that you’re a parent! That unbelievable kind of happiness about having a baby is all yours to enjoy. But raising a child isn’t just all about excitement and joy. You must also be sure that you’re financially able to care for your little one, from now until forever! Prioritizing your long-term financial stability early on is beneficial as it gives you a bright future with your family. Needless to say, a positive mindset toward financial planning requires the right approach, too.

Here’s a guide that describes the steps you can take to make your growing family financially ready and strong.

1. Protect yourself (and your partner) first
   
   Do you know why airplane signs and airline personnel advise you to put an oxygen mask on yourself first before helping others during an emergency? This is because you literally have seconds before you pass out from hypoxia (lack of oxygen). You probably won’t be able to save even yourself if you think about helping others first.
   
   The goal of putting your face mask first is to keep you safe, so you can then respond to people who might need assistance with a sound mind and body.
   
   In like manner, parenting requires that you get your priorities right. Yes, you have tremendous responsibilities as a parent. There’s a household to maintain, relationships to nurture, a future to plan, and so on. None of these things you can ignore.
   
   Yet, you can’t do any of these duties and responsibilities if you don’t sort yourself first. The same goes for your spouse or partner who’s there to share parental responsibilities with you.
   
   When protecting yourself and your partner becomes part of your priority, you’re also doing a great benefit for people who depend on you because then you can do more as far as family care is concerned.
   
   One of the most crucial preparations you can do as a new parent is prioritizing life insurance for you and your life partner over lifestyle upgrades. In case of an illness, your life insurance coverage can help you get medical care without having to worry about where to get the necessary funds. And should the time come that you’re no longer around as the family provider, your loved ones will have financial benefits to pull them through.
   
   
2. Save for your child’s future
   
   As a parent, your family’s welfare is always in your mind. You want nothing but the best for your children, especially when it comes to their education.
   
   Unfortunately, education-related expenses are rising year on year. It’s a challenge that requires foresight about investing and saving up for your child’s college education. Just make sure that you’re keeping your investment risks low while targeting high returns.
   
   This way, when your young one reaches college, you’ll have enough resources to afford sending your child anywhere in the world and get the best education possible.
   
   
3. Build your passive income
   
   Your vitality is one of your best assets and is something you can leverage to accomplish your financial goals. At this point, you should think of ways to generate passive income while you’re at the peak of your health and you’re earning steadily. Passive income is about making small, consistent sacrifices in your current lifestyle, so you’ll be able to reap bigger things in the future.
   
   It can come in many forms, including excess amounts from your monthly budget, revenue from an online business, or stock investment returns. The trick is not to touch anything that comes from your passive income and putting it toward your savings or somewhere else that can help you gain compounding returns.
   
   
4. Teach your children the value of financial planning
   
   You want to instill in your children positive values that they’ll be able to take with them as they grow older. Getting the foundations right not only means you did your parenting job well, it can also empower your children to go through the different stages of their life with more readiness.
   
   So, whether they’re little or are already young adults, you need to consistently educate them about the value of money and making smart financial decisions. Use each stage of their developmental years to help them prepare for the succeeding life event that they will be facing next. For example, your youngster may be completely dependent on you financially, but over the next couple of years, your child should be able to have more insights about starting a personal savings fund—no matter how small it is.

Setting Up Your Family for Financial Security

Being a parent means a lifetime commitment toward protecting your family and caring for them as best as you can. In securing your family’s future, you need to have a vision and a plan on how you can give them a good quality of life. Living healthy is a good start, so you and your family can spend the rest of your life happier, longer, and stronger.

Need advice about your financial plans? Visit any of the 900 BPI branches and talk to our Bancassurance Sales Executive.