New parents can strengthen their child's financial future through strategic financial planning that addresses multiple aspects of family security. According to Yudhajit Baul, Founder of Yudhajit Financial Services Pvt Ltd, new parents often overlook financial preparedness while focusing on childcare responsibilities. The expert emphasizes that adequate term insurance and comprehensive health insurance are the foundation of any financial plan for young families. Parents must also maintain sufficient liquid surplus for family health emergencies and start investing in their child's higher education through equity mutual funds via SIPs for long-term wealth creation.
The importance of early investment is highlighted by Baul's analysis of education cost inflation. Higher education costs currently around ₹30 lakh will inflate to ₹1.2 crore in 18 years at an 8% inflation rate. To build this corpus, parents should invest ₹15,765 per month for 18 years in equity mutual funds at a CAGR of 12.62%. However, delaying investment by just 12 months can result in a shortfall of approximately ₹15 lakh over the same period. The expert recommends investing exclusively from the minor child's bank account to maintain commitment to long-term goals.
Building an emergency fund covering at least six months of household expenses is crucial for family financial security. As reported by Baul, this financial cushion helps families navigate unexpected medical costs, job loss, or other emergencies without disrupting long-term investment goals. Regular financial plan reviews and increasing investments as income grows can further strengthen future financial security. The comprehensive approach includes adequate life insurance term plans, sufficient health cover, and disciplined long-term financial planning to achieve future financial goals.
The expert framework emphasizes that regular investments and periodic reviews help achieve future financial goals. According to Baul, parents should prioritize building an emergency fund that covers unexpected expenses without disturbing long-term investments. The combination of adequate term insurance, comprehensive health insurance, emergency fund, and disciplined long-term investment planning provides children with a solid financial foundation for accomplishing their long-term life objectives. This systematic approach ensures families can navigate various financial challenges while building wealth for their children's future.
