Financial Planning Tips for New Parents
Introduction
The joy of welcoming a baby is unmatched. But along with love and laughter comes new responsibilities – especially financial ones. Hospital bills, childcare, education, and long-term security – all need careful planning.
To show how planning makes a difference, let’s look at a real-life inspired case study of Aarav and Meera, a young couple from Pune who became parents in 2024.
Case Study: Aarav & Meera’s Journey
- Age: Both 30
- Combined Income: ₹20 lakh/year
- New Goal: Plan for their newborn daughter’s future (education + marriage) while protecting family security.
They approached us for guidance. Here’s how their plan unfolded:
1. Education Planning (Using Time Value of Money)
- Current cost of Higher Education in India: ₹25 lakh
- Education inflation: ~10% annually
- Future cost after 18 years: ₹1.25 crore
To achieve this, they need a SIP of ₹15,000/month for 18 years (assuming 12% CAGR). Aarav and Meera started a dedicated SIP the month their daughter was born.
2. Emergency Fund
With a child, surprises are guaranteed — medical emergencies, lifestyle changes, job risks.
They created an emergency fund of ₹6 lakh (6 months of expenses) in a liquid fund.
3. Insurance for Protection
- Aarav bought a ₹2 crore term plan (20x his annual income).
- Meera, who had employer health cover, also took a separate ₹10 lakh family floater, so the baby was covered from 90 days onward.
This ensured the family’s security even if something happened to one parent.
4. Child-Specific Bank Account
They opened a separate bank account dedicated to their daughter. All gifts, bonuses, and SIP redemptions for her education flow here. This simple step builds discipline and avoids mixing funds.
5. Will & Record Management
Aarav and Meera documented all insurance policies, bank accounts, and investments in a Financial Record Management (FRM) Tool and also wrote a Joint Will with their daughter as beneficiary. This ensures there’s no confusion in the future.
The Result
With these 5 steps, Aarav & Meera ensured:
- Their daughter will have ₹1.25 crore for education at 18.
- The family is protected with adequate insurance + an emergency fund.
- Finances are organized, so their child will never be left clueless.
They now enjoy parenthood without financial stress – knowing the future is under control.
Conclusion
Becoming a parent isn’t just about caring for your child today — it’s about securing their tomorrow. By planning early, you not only provide financial security but also peace of mind.
As Aarav and Meera’s story shows, a few smart decisions today can create lifelong confidence.
Are you a new parent? Book our Financial Planning for Newborns Consultation and walk away with a customised roadmap for your child’s future.
