Plan For Your Child’s Financial Future: What You Should Know

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It is every parent’s responsibility to give their children a bright future. With this comes some preparation in making sure that every need of the child is met from birth until he or she reaches adulthood. This makes the task of a parent much more complicated and extensive than one may assume – but it is also very rewarding. After all, how can you not be proud of your precious child after finishing school in flying colors, as you have been part of the reason why this happened. With your dedication to giving your child everything, you are able to create a wonderful future that he or she truly deserves.

For some parents, however, who have not prepared well for their child’s finances, there are some hiccups that come their way. These may include the difficulty with sending the child to school, considering the expensive tuition and other fees involved with education. Then, there are a few more expenses to worry about, which entail an extensive preparation for these. That is why there are parents who decide to take out a personal loan from a money lender Singapore citizens recommend when it comes to the dependability and reputation of the financial institution to help them cover their needs. The loan is sometimes used to pay for expenses at home, along with potential other costs that may be too much for some parents to handle due to the increasing cost of living in the country.

Financial Planning Makes Sense

As a parent, you need to give your kids a proper head start before they even learn how to walk. This is why you want to begin by searching for quality and reputable schools in the country that can be instrumental for the proper development of your child. It is a matter of determining the school’s vision and mission and determining if these are in line with your own philosophies and what you want for your little one.

But there are some parents who spend too much on their child’s education by choosing prestigious schools with skyrocketing tuition and fees. The question is, do you really need to do this? Or perhaps there is a more practical option for the school where your child should go?

You see, you also need to factor in your other expenses in the household including the rest of the family. You want to make sure that everyone gets his or her fair share in terms of the expenses, and you are not just blowing up your expenses on one child. Taking care of yourself is also essential, along with the other family members.

Getting All Geared Up for Your Child’s Financial Future

You can only give too much of what you have. This is why you can never force yourself to save a huge chunk of money for your child if you barely have anything coming in from your income. Also, you need to also set aside funds for your personal needs and retirement. Thus, there has to be multiple income streams that will support all the financial concerns of the whole family.

So how can you safeguard or build your future in terms of the financial aspect of it? We can do so by considering these things that help secure your financial future.

1. Come up with a passive income stream.

It is important to have a job, but at the same time, you need to make sure there are other means for you to earn some money. Perhaps you may want to set up a business or at least invest in annuity plans that make some cash in the long run. These are some smart and practical ways to obtain passive income that will surely make things lighter for you in terms of your finances.

Do you want to grow your money more instead of just putting it in a regular bank savings account? In this case, it may help to consider investing in stocks and bonds that are performing well in the market. If you have a property, turning it into a rental place where you can collect monthly income from is also a wise idea.

2. Eliminate financial obligations if you can.

Having a lot of debts can make things harder for you to deal with the increasing expenses of your child and the whole family. This is why if you can possibly get rid of these recurring financial obligations, then you may want to do your best to slowly pay them off. Your debt payments tend to take up a huge chunk of your income, so only a small percentage may be left for your savings – if there is any left at all. So, to increase your savings and secure the financial future of your child, make it a point to pay off all your loans and stop incurring more debts if you can. At the same time, continue building your passive income that will help with your financial goals.

3. Consider buying health insurance.

It is true that your health is indeed a source of wealth. If you are not healthy, then your finances will also suffer. You may be forced to take a leave from work, or it may be tough for you to manage your business or other side jobs that are making money. At the same time, the cost of going to the doctor and undergoing medical treatment in Singapore can be astronomical. This is why if you have no insurance, it can get even more stressful for you.

Although Singaporeans are mostly covered with MediShield and MediSave, but these are not enough as they do not pay off the entire bills. With health insurance, you have some coverage for your hospital expenses. You do not need to dip into your bank savings to pay for an urgent medical bill since your insurance policy probably has the coverage that will suffice for your medical condition. Just imagine how much of a relief this will bring if every family member has health insurance. Then you can protect yourself and your savings whenever unexpected illnesses come along.

Drawbacks of Not Preparing for the Financial Future of the Family

Now that we know the different ways on how you can prepare for the finances of your family, it may be worth looking into the negative effects of not going down this road. If you fail to handle your finances properly, then everyone in the family will suffer. Not only you, but also your children because they may have to stop attending school or end up being enrolled in a school that is not the best fit for them.

This will snowball to greater difficulties in the future including not being able to find a job that offers a lucrative income because insufficient skills are acquired. Also, if your child truly wants to pursue a different career, but a lack of finances forces him or her to take another degree, then this only leads to discontent.

With all these things in mind, you should do your best to plan for your child’s financial future as well as the whole family’s. You may begin by following the recommendations we have provided in this post, which mainly focuses on having a good cashflow for the family every month. Aside from your employment, you need another source of income that will help grow your savings. This may be in the form of rental income, investment, and a small business that will add to your monthly salary.

Then, be sure to cover the whole family’s health needs. Your health insurance coverage can support the expenses for medical treatment and hospitalisation, and you can also prevent yourself from having to take out unnecessary loans or getting some cash from your bank savings in case an urgent medical expense needs to be paid.

Lastly, prepare for your child’s education. Make sure you send him or her to a good school that will harness all his or her potentials to become a successful individuals in the future. With good health, proper training and education, along with a positive upbringing, you can shape your child into a responsible and thriving individual who can make a difference in this world.

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