Your money can be a source of joy or sorrow at the same time to you and your loved ones. At times, relationships are made or broken over money. You do not want money to be a problem in your personal relationships. If you resort to financial planning in your early work life, you may be able to avoid them. It may not be possible to eliminate money-related problems, but you can surely minimise them through better planning.
Your child’s professional life
Marriages are a multi-billion dollar industry in India and around the world. It will remain so for years to come. Young parents tend to save and invest early in their lives to marry off their children.
In India, an RBI survey highlighted that marriage remains a top priority in poor as well as affluent households.
A lot of financial literature lists a child’s wedding as an essential expense for young parents looking to invest in their child’s future. Mutual funds, life insurance policies and other forms of long-term investment instruments are sold highlighting marriage as an essential goal.
Here is a new suggestion
You must make professional education of your children a top priority over their marriage. When it comes to saving and investing, prioritise the cost of your child’s higher education. Your child needs you to back them to excel professionally. A lot of parents resort to borrowing for the purpose as other expenses like marriage.
That pushes education down the priority list. Considering the spiralling costs of everything, you need to draw a priority list. Your children deserve a quality education to take on the complex new world. Professional courses are an expensive affair and scholarships are not for all. If you harp on your child’s marriage as a goal, it may leave you stranded. You may fall short of expectations. However, the support you give to your child’s professional life may go a long way in securing their personal life too.
If you have started work recently, you may take a while to realise it. Your parents deserve your support when they get old. Life expectancy is much higher in India than before. Retirement is easily 20-to-30-year phase for many in India. Healthcare costs have shot up, and your parents have not factored in longevity when planning for retirement.
As a child, if you wish to do something for your parents, start a systematic investment plan as soon as possible. Designate it as a healthcare fund for your parents. Insurance policies for the elderly are expensive. Putting this money aside would ensure that you do not have to apply brakes to your dreams. You can look after your parents and pursue your personal financial goals. If you wait for an emergency, it will hurt your finances at a point of time when it should not.
As you start a new life after marriage, you may want to take stock of your income and expenditure. When you get married, you are building it all together. It is a good idea to work on your money, just like you work on your emotions. Financial advisors are suggesting a ‘money date’ to spouses. They recommend making it a monthly affair.
The idea is to go out with your spouse and review your finances. There are a lot of things to discuss on a money date. These include making a list of goals and setting priority, segregating them into long-term and short-term goals. Then comes the issue of providing for those goals. Your goals could be related to acquiring assets or managing significant expenses. You must understand that both of you have to share the responsibility for assets as well as liabilities. The practice would allow you to iron out differences over money issues meaningfully. Your money date is the perfect way to interact and figure out a solution.
Pursue your goals while fending for a sick parent
if you wish to do something for your parents, start a systematic investment plan as soon as possible. Designate it as a healthcare fund for your parents. Insurance policies for the elderly are expensive. Putting this money aside would ensure that you do not have to apply brakes to your dreams. You can look after your parents and pursue your personal financial goals. If you wait for an emergency, it will hurt your finances when it shouldn’t.
(The author is editor-in-chief at www.moneyminute.in)