Financial planners say, the beginning of marriage is an important time for families to build the future financial structure. Therefore, the longer the family’s needs will become more complex with increasing child, age, and the necessities of life. Therefore young couple having to scrimp and carefully from the beginning married.
The desire to have children become the majority of newly married couples. The presence of a child, in fact, considered a marker of a household perfection. Unfortunately, young couples often forget that the presence of children means there are more financial responsibility to be prepared, ranging from primary until the fulfillment of educational needs in the future.
If the newly married couples do not have the financial awareness, children’s needs it is probably be neglected. You certainly do not want this happen to your child? Therefore, when a first baby born, have a financial management planning plan is a must.
Bad habits when young couples get their first child, they purchase baby needs excessively. Call it, buy clothes and baby gear until pile up. In fact, a fairly rapid period of growth in under five years of age (toddlers) will not cause the clothing worn in a long time.
Buy the baby needs not excessive, or you might borrow from your family and you don’t have to be a shame to use it or rent baby equipment. Mistakes made by young couples usually happens because very happy to get the baby.
Allocation of funds
Instead of wasting money for temporary purposes, financial planners recommend that families complete the immediate needs of the posts related to the interests of the child. Well, here are some posts that should be allocated:
Adding emergency fund
Before buying protection or investing, families are required to have an emergency fund. This emergency fund aims to cash reserves at any time if the source of income is interrupted.
Financial planners say when the young couple without children, emergency funds can be reserved three to six times the total monthly expenditure. Examples of spending $ 1,000 emergency fund should accumulate $ 3,000 – $ 6,000.
However, when the baby started to complement your family life, an emergency fund should be injected more into six to nine times. Still with the same example, the monthly expenditure $ 1,000, then the emergency funds that must be met is $ 6,000 – $ 9,000.
Fulfillment nine times of emergency funds will not be easy for all the young couples. Solution, can be collected at the beginning 30% of the nine-time emergency fund first. Or, if continuing the same example, an emergency fund should be met of $ 2,700.
Well, as time goes on, the young couple can meet the recommended servings. With a capital of 30% of the emergency fund has been fulfilled course, the young couple continued the following steps, which buy life insurance.
Emergency funds should be easily liquidated. It is therefore advisable funds placed in savings, deposits, gold or money market mutual funds.
Buying life insurance
When began to have children, young couple should buy life insurance. Life insurance is intended to protect the financial risk of the breadwinner in the family. With hope, if anything happens that causes the breadwinner lost a source of income, there is insurance can replace that function.
Insurance money could be used to meet the needs of the child’s life until adulthood. The young couple must calculate the correct projection of the needs of children until adulthood. The amount of insurance money will affect how much premium should be allocated. Therefore, large-small premium would reduce the monthly income of the family.
If both husband and wife work, is it necessary each of them purchase life insurance? Financial planners say, depending on the functions of each salary.
When the husband and wife salary be the principal source of fulfilling the needs of the family, each is required to purchase life insurance.
Conversely, if one does not support the salary of the family income significantly, owners salary should not buy life insurance.
It could even be, both husband and wife, do not buy life insurance. With notes, there is passive income from asset holdings are much larger than the monthly salary.
In addition to life insurance, other insurance shall be added to health insurance for their children. Average insurance companies require a minimum age of participants is 30 days of health insurance. We recommend since the age of the child to buy health insurance. Advice financial planners, families can buy a collection of health insurance. By doing so, the premiums paid can be minimal.
Cost of children’s education
Not just child’s clothing or food that requires huge funds, but also educational. Financial planners suggest, since the child is present in your life, allocation of education funds is a must, education investment can be divided based on levels of education, such as the level of play group, kindergarten, elementary, junior high, high school, and college.
Investment can be adjusted to the level of education. The higher the level of education that will be addressed basket of investment options would be more aggressive in the hope of greater returns. Choice of investment products, such as precious metals for the short-term, mix mutual funds for medium term, and mutual fund shares for long term investment.
If a young couple difficult to meet all levels of educational investment at the same time, the family can repay the investment of the post farthest education. For example, investing for a college education and then continuing up to the nearest education. Because the farthest education funding actually the smallest.
Tightening the belt
The third allocation of expenditure will certainly be making a big expenditure. If you are fixed a source of income, meaning that there must be a strategy that must be done. With the goal, all allocations must full filled but of basic needs not interrupted.
By reducing unnecessary expenses, for example, when have no children, you and your spouse have a hobby dinner at a classy restaurant or a little bit expensive trip, this habit can be reduced, the most important things is review of all unnecessary spending.
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