Financial decisions that you have to take before planning a second child4 min read . Updated: 05 Feb 2018, 01:53 PM IST
The decision of adding a new member to the family comes with a list of responsibilities that cannot be ignored
Stepping into parenthood for the second time can be quite exciting. Of course, who doesn’t want to have fun with the kids? But, since this is a very crucial decision of your life, you need to do a lot of pre-planning before to welcome the new member to your family. Most importantly, you should be financially sound to cushion all the expenses that are coming your way in the near future.
Well, you might have covered all the tried and tested methods of saving money but still, there are certain investment decisions that you should think about before planning a second child. The expenses that you have to incur for a second child are not going to be that easy to handle. To reduce the financial pressure, take the below-mentioned decisions before you plan for your second child:
Life insurance for a secured life
Since you are the only support for your child, insuring yourself is the very first investment decision that you should take before planning a second child. In other words, a life insurance policy is a must for parents who want to give a secure future to their children. This type of insurance scheme will give you and your family maximum financial cover in the later stages without compromising on your bank account. By getting a life insurance plan which usually comes with a hoard of tax-saving benefits you can not only secure the life of your child in your absence but can also save up to 20% of your income.
Disability insurance for income coverage
Life is unpredictable; you never know what is waiting for you in the next turn. Unfortunately, if you meet with any mishap and lose the ability to earn, it will affect the future of your children. To safeguard your children from any such situation, you should consider investing in disability insurance. Though this is one of the underrated forms of insurance for parents, it can be of immense help in unfortunate circumstances. By taking a short-term disability insurance you can cover maximum of your income until the time you recover. This can also help you come out of debt in case any complications come your way.
Personal loan for the added expenses
Having a second child doesn’t decrease the responsibilities that you have towards your first child. You have to spend equally for both of your kids to offer them a well-balanced life. However, it is not easy to bear the expenses of both the children, especially when the cost of living has increased a lot. In the initial days, you need a lot of money to meet the hospital expenses, child care costs, and other necessities of your second child. To backup all the added expenses of your newborn without compromising on the needs of your first child, it is wise to get a personal loan. You can use the money as per your requirement while paying low-interest EMIs for a long tenure.
Health insurance to back up medical expenses
Your health plays a major role in keeping your family happy and prosperous. If the parents are healthy, children are happy naturally. But there is no assurance that you will always stay healthy, complications might occur in future. If this happens you will need a lot of money to come out of the situation. The wise financial decision that you can take to backup such unforeseen situation is to get yourself covered with a health insurance. Since it will cover all the medical expenses, you can live a happy and stress-free life with your kids. In short, when you are covered by a health insurance policy, your family needn’t go through financial turmoil caused by the unforeseen treatment expenses.
Car loan to ensure easy accessibility
A family of four people might seem picture-perfect, which is no doubt true, but when you have two children, travelling is not easy. You need to take care of the safety as well as the comfort of your kids while travelling. Even though travelling by public transport is a cheap option, it is not a safe and comfortable mode of travel. Contrarily, the high expenses of travelling in private vehicles will overshoot your monthly budget. In order to get rid of all these troubles, consider buying a car by applying for a car loan. This will not only ensure the easy accessibility of your family but will also help you to travel with ease without exhausting your savings.
Child insurance for the safety of your child
Last but not the least, just like your first child, your second child’s life should also be insured. A child insurance plan helps in securing a child’s future without hampering his/her higher education. It will cover all the expenses that you need to incur to provide good education to your children. This is why you should take the decision to buy a child insurance plan for your second baby as well in order to provide a good life to both of your kids. Make sure to buy the insurance plan early otherwise you might find it difficult to bear the increasing expenses in the later stages.
Having said all this, it is clear that the decision of adding a new member to the family certainly comes with a list of responsibilities which cannot be ignored. To make yourself capable of fulfilling all the responsibilities without facing any issues these financial decisions should be taken much before bringing the new bundle of joy in this world. So start implementing these tips from today and ensure a peaceful family life!