4 Simple Investment Tips for Millennial Parents
Bringing up a child is a huge duty. As a parent, you need to provide your little one with the best possible life and ensure to raise him or her to be a responsible citizen. The biggest challenge here is the rising cost of childcare. If you are a young parent, you already know how much it costs to have a child in today’s world. Moreover, you have to think ofhis or her future and how to make it more comfortable.
Here, we aim at reducing your worries by providing information regarding some effective investment options, which will help create financial security for your children. Read on to know about some valuable investment ideas.
- Create a backup fund
The most important lesson we can draw from 2020 is that you should always be ready for any challenge that life throws. Having an emergency fund is the best way to tackle life’s unpredictability. Such a fund can prove handy on a rainy day. Depending on how many children or other dependents you have, this backup fund must be large enough to provide you financial security for at least a year.
You can build a contingency fund by investing in long term investment instruments, which offer high returns. You can consider purchasing a Unit-Linked Insurance Plan (ULIP), which helps you accumulate significant wealth and simultaneously offers a life insurance cover. Moreover, ULIPs let you withdraw a portion of the fund in case of sudden financial emergencies after you complete the lock-in period of five years.
- Invest in life insurance
It is needless to say that your children rely on you when it comes to monetary security. In case you cannot be there for them, theymay have to face financial challenges. The best way to avoid this is to invest in a life insurance policy. One of the best investment options for this purpose is a term plan. It will cover your loved ones’ financial needs in your absence. This is something that you must do without any delay.
Along with a term life insurance policy, consider buying additional riders like critical illness, accidental death, and accidental disability. With a suitable term plan, you can have the peace of mind knowing that your children will be financially independent in any situation.
- Start saving for the future today
If you think it is expensive to run a household with toddlers, imagine how costly it will become in thefuture. When children start their education, you will have to provide for their school fees, books, tuition fees, and uniforms. These expenses will only get stiffer with time, which is why you must start saving for the future right now.
To determine how much money you will need for your children’s education,analyze the current costs. Considering that the expenses will only be higher in the future, you can estimate a realistic budget, keeping inflation in mind. Additionally, seek professional help, as an expert can assist you by creating a more accurate plan, to help you achieve your financial targets.
- Plan for long–term expenditures
Long-term financial planning is an essential aspect of being a sensible parent. You may have an idea that it will cost a fortune in the future to send your children to college and finance their wedding. This is where a long-term investment can benefit you immensely. As already mentioned, a ULIP is an excellent policy, which creates a substantial fortune over an extended period. Set up a ULIP that matures when your children reach the age of 18 as, by that time, you will build a respectable education fund. A ULIP, which primarily invests in equity funds, can help you build the necessary capital.
Analyzing, comparing, and selecting from various online investment plans can make it simpler to execute these tips. Be it a term insurance policy or a ULIP, you can buy any plan right from the comfort of your home. Investing online saves time and gives you the chance to compare different options easily.