One of the major challenges that you will face when you have a baby is in planning your finances. You should and must be aware that you do not have that much time to really think and plan. If you procrastinate, then you are running into the danger that might cost you time and money.
Take precautions and not make mistakes
There are many things and areas that you can cover, but the most important thing is to be ready for emergencies. This is most crucial especially when you have a baby and your family is starting out. Here are some pointers.
An emergency fund
You might have been saving up by putting some money away from your monthly wages. Since your baby was born, you realize that this account might have been diminishing. It is now time to replenish the amount there so that you have an emergency amount kept away. The best way to do this is to instruct a direct debit from your bank account. You’d never know when you need the money.
Don’t forget yourself
Saving money for your baby is a good thing. But you must not forget about yourself. Your own savings must take priority as well. This might be hard to do since your financial commitment now is all about the young one. While you have put aside some amount for emergencies, ensure that your own savings get the same treatment as well. In the long run, you must consider your own retirement fund as well.
Start saving for your child
It is never too early to save. You should open a bank account in your child’s name as soon as possible. This is where you can start transferring a small amount to this account so that he can continue saving when he can. Cultivating a saving habit can never come early. Once your child is old enough, teach him to use this account.
In Malaysia, the government does provide providence for tax relief when you have a child. This could come from paying for insurance, education and other expenses. Never underestimate what these provisions can do to your bank account. Talk to an expert and see how you can save in the long run and make adjustments where necessary. Among the areas that you can consider are:
- Health insurance for your child
- Savings in government funds like PTPTN