Now that you have given birth, the stresses of preparing for the little one's arrival has now been replaced with the stresses of parenthood. In the initial months, you will be too busy adjusting to the lack of sleep and caring for the baby 24/7 to even bother thinking too far ahead. But once everything starts to settle down, you need to start planning your finances for your child's future.
Since the arrival of baby J, the pressure to earn more and save more has become even more palpable, especially since we are living in the world's most expensive city as of this writing. So, what should young parents do to try to prepare for their children's future financially?
1. Do not spend more than what you are earning. Yes, having a baby is a very good excuse to go on a shopping spree all the time. But, we need to remember that our babies grow up very fast. We should not use up our entire salary every month.
2. Save at least 30% of your monthly income. Financial analysts always say that to be able to cope with retrenchment, you should have at least 6 months' worth of salary in the bank to be able to keep you floating for at least 3 months. If such is the case, then ideally, we really should save 30% or more every month.
3. Look for passive income. For employees and professionals, we need to make sure we are earning something even after retirement. Hence, we need to start looking for a way to earn passive income while we are still in the workforce. Passive income may mean buying properties, investing in stocks (if you know how the stock market works), or other businesses that will afford you income after retirement.
4. Invest in a property. These days, it is so much easier to buy properties since many developers are now offering zero percent interest for in-house financing. It is also easier to file for a home loan now with fixed interest rate for a few years. While we are still capable of working and earning, we should start thinking about this.
4. Do not leave all your money in the bank. Businessmen do not believe in leaving all their money in the bank because leaving it in the bank will only give them a very small interest rate. Whereas if they invest it, they have the chance to earn a whole lot more.
5. If your expenses go up, your income must go up. If your expenses go up, cutting back on your savings is not the answer. People in the financial industry always advise that a higher income is the only way to address this. Once you have been accustomed to a certain lifestyle, it may be very difficult to change it in a heartbeat.
6. Do not use your child's money. When children are given monetary gifts when they are young, do not use it to buy things for them. Instead, save the money and give it to them once they are mature enough to handle their finances.
7. Teach your child early on about the value of money. Children should learn the value of money early so they will not be dependent on their parents someday. Yes, parents will always be there to support their children, but at the same time, we should encourage them to open their wings and soar on their own merit. We should teach them to strive and work for what they want so they will bring this attitude with them when they grow up.
All these things may seem easier said than done, but, we have to start somewhere. Let our children be our inspiration. Let us not start tomorrow, but begin today. After all, "The journey of a thousand miles, begins with a single step." - Lao Tzu
Since the arrival of baby J, the pressure to earn more and save more has become even more palpable, especially since we are living in the world's most expensive city as of this writing. So, what should young parents do to try to prepare for their children's future financially?
1. Do not spend more than what you are earning. Yes, having a baby is a very good excuse to go on a shopping spree all the time. But, we need to remember that our babies grow up very fast. We should not use up our entire salary every month.
2. Save at least 30% of your monthly income. Financial analysts always say that to be able to cope with retrenchment, you should have at least 6 months' worth of salary in the bank to be able to keep you floating for at least 3 months. If such is the case, then ideally, we really should save 30% or more every month.
3. Look for passive income. For employees and professionals, we need to make sure we are earning something even after retirement. Hence, we need to start looking for a way to earn passive income while we are still in the workforce. Passive income may mean buying properties, investing in stocks (if you know how the stock market works), or other businesses that will afford you income after retirement.
4. Invest in a property. These days, it is so much easier to buy properties since many developers are now offering zero percent interest for in-house financing. It is also easier to file for a home loan now with fixed interest rate for a few years. While we are still capable of working and earning, we should start thinking about this.
4. Do not leave all your money in the bank. Businessmen do not believe in leaving all their money in the bank because leaving it in the bank will only give them a very small interest rate. Whereas if they invest it, they have the chance to earn a whole lot more.
5. If your expenses go up, your income must go up. If your expenses go up, cutting back on your savings is not the answer. People in the financial industry always advise that a higher income is the only way to address this. Once you have been accustomed to a certain lifestyle, it may be very difficult to change it in a heartbeat.
6. Do not use your child's money. When children are given monetary gifts when they are young, do not use it to buy things for them. Instead, save the money and give it to them once they are mature enough to handle their finances.
7. Teach your child early on about the value of money. Children should learn the value of money early so they will not be dependent on their parents someday. Yes, parents will always be there to support their children, but at the same time, we should encourage them to open their wings and soar on their own merit. We should teach them to strive and work for what they want so they will bring this attitude with them when they grow up.
All these things may seem easier said than done, but, we have to start somewhere. Let our children be our inspiration. Let us not start tomorrow, but begin today. After all, "The journey of a thousand miles, begins with a single step." - Lao Tzu
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