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(Serious) Words of Wisdom : "The stock market is a giant distraction from the business of investing." ~ John Bogle

Ten Key Money Tips For Parents When A New Baby Is Expected

Having a baby is one of the greatest joys in one's life.

However, it also brings about a monumental change in our responsibilities and liabilities. These can appear quite daunting, intimidating and challenging... if not planned well and well in advance.

So here's a short and sweet 10-point checklist to ensure that your transition into parenthood is 'financially' smooth and joyful.

1. Start by creating a short-term kitty to take care of both the delivery expenses and the numerous items you will need soon after your child is born. This includes baby-pram, baby-toys, baby-cot, baby-seats and much more. A recurring deposit or a liquid fund would be the ideal options to create this short-term 'baby-fund'.

2. Don't be hesitant to use hand-me-downs. As any baby outgrows the clothes, toys etc. very fast, it makes no sense to buy everything new. All this money saved would be more useful for other critical needs such as insurance, day-care expenses, debt-reduction, education, etc.

3. Check out the maternity (and now in some cases even paternity) leave and other benefits, if any, offered by your employer(s). Accordingly, you can derive the maximum gains from such benefits. Also, check for the insurance cover for maternity-related costs, if any, in your individual and/or your employer's group health insurance policy.

4. Include your baby's name in your health insurance policy. And if your employer is also providing medical insurance for your family, don't forget to furnish the updated details of your family so that your new-born child also gets covered under the same.

5. Your life is now precious to one more person. So, suitably enhance your life insurance cover. To reiterate the obvious, Term Policy is the simplest, cheapest, easiest and the best way to do so.

Are you 'financially' prepared to have a new baby?

6. Monthly budgets would have to be redrawn so that you can comfortably accommodate the increase in expenses on baby feeds, baby powders, baby clothes, baby doctor and so on. And, in a few months after the baby's birth, once the mother goes back to her job, day-care and baby-sitting expenses will become a critical part of your monthly expenses.

7. Though still years away, education is becoming quite expensive. So "now" is the time to start building a suitable education fund for your child. By the way, don't be lured by the 'useless' moneyback or endowment types of insurance plans. Go for pure-investment products ONLY.

8. Use your bonuses and other lump sum inflows to part prepay your loans and slash down your debt burden. Alternatively, add these funds to your child's education corpus. You will sleep more peacefully, just like your baby.

9. Rewrite your Will.

As you may have noted, you have to do NOTHING DIFFERENT for your child. What is good for you, is good for your child too. 

Therefore, don't fall for the "emotional traps" laid by the manufacturers of toys, prams, dresses and varied other baby-products. Likewise, don't fall for the "emotional traps" laid by the financial companies / intermediaries such as insurance companies, mutual funds, agents, etc.

Their primary aim — by including the word 'child' in their products and services — is to make money for themselves by exploiting your love for your child. Hope you don't get emotionally blackmailed.

Concluding: Having a baby is a BIG event in one's life, which is going to dramatically change our lives. Therefore, our personal finances and investments have to suitably restructured.

An Investment In Knowledge Pays The Best Interest ~ Benjamin Franklin

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