Avoid common investment mistake made by newly parents

There are some common investment mistakes that newly parents often make. But if you take some caution and avoid them, then it can make your and your child’s future financially secure. As soon as you become parents, you need to include investment goals of your child in your financial planning.

Start early: People often start financial planning for their children when their college life is just few years away. But this is not the way, you need to start financial planning for your children as soon as they are born, or else, you will need to invest hefty amount to achieve their financial goals such as their higher education or marriage.

Inflation: Usually, parents look at current cost to decide future financial goals. And this is a very common mistake that parents make. You need to factor in inflation while deciding future goals.

Under insured: As you become parents, it is the time to review your insurance and increase it. Sum assured that you might think enough before having a child might not be enough after becoming parents. Hence, as new life come into existence, you need to increase your sum assured as well.

Wrong insurance plan: People often end up buying multiple insurance plans that are often investment oriented, which has very little insurance and costly investment. The best way of being adequately insured is through term insurance plan, which is the cheapest form of insurance. You need to keep insurance and Best Investment Plan needs separate.

Personal accident cover: People often don’t recognize importance of having a personal accident cover. Probability of dieing is much lesser than injuring oneself in an accident that can make you disabled and impact your capacity of earning. Hence, you need to have a personal accident cover in your financial planning.

Health insurance: People rely on their employer’s health insurance. But that is not enough as your family grows. You need to buy family floater health insurance policy covering all your family members, including kids.

Child plan: A typical insurance plan for children is a child insurance plan. The plan offers insurance benefits immediately on the death of the policyholder, and subsequently waives off future premiums and pays them on behalf of policyholder. On maturity, the beneficiary gets maturity corpus.

Here, people make one common mistake that they tend to overlook that whether child plan is providing cover on their life or their child’s life. You need to buy a child plan that provides cover on your life and not on your child’s life. Because your child need money when you are not there.

Retirement plan: While planning their child’s future people often forget planning for their own retirement and eventually depend on their children after retirement. Hence, you should start planning for your retirement as soon as you start earning.

If you pay little attention to define goals and plan in advance, than you can achieve all your goals without any hassle.