We are aware that there are many issues that you need to address when it comes to money and cash flow after having a baby and starting a family. Here are some quick tips and decisions that you could consider.
So many decisions, so little time
We know that when it comes to money and payments, it is difficult to make a decision quickly. At times, everything seems to be on promotion that if you do not decide quick, you might lose the benefit. But in whatever situations, it is important to stay calm and take a step back before committing.
What about my debts?
In the modern world, credit card debts and personal loans are common. If you have outstanding payments, you should consider paying them off as soon as possible. However, you cannot disregard your family’s financial health. Start with a small RM1000 emergency fund, then build your way up. Meanwhile, commit to paying off your debts in the shortest time possible.
Should you borrow from your family members
When push comes to shove, and you find yourself in a situation where you are financially tight and need some form of emergency cash. You can always ask the bank for a personal loan but that would put you in a tighter situation in the near future. One option that you can consider is to borrow from your family members. You can calculate a certain interest rate to pay them back as well. But you need to commit to it.
Having a medical plan is now more important than ever. This is where you need to work out a plan for your child in case of emergencies. In Malaysia, these plans can offer tax exemptions and other reliefs. Talk to your financial advisor and find out what options you have immediately. Do not postpone this move.
Invest your money
Medium and long term plans are important. You need to start investing in either a savings account or in a more reliable platform. The savings account is one which you can use for expenses when needed. So, put away some amount of money for essentials and emergencies. However, you need to start thinking of the future. Buy an education-related insurance plan for your child. Do not invest in the volatile markets. Look for the more stable ones like unit trusts or in some cases REITs.
Should you pay extra on your loans?
In paying more on your monthly loans, you might shorten the lifespan of repayment. However, it is a form of investment. If you decide to take this route, you need to ask yourself if that is the best option. Could you move your money elsewhere which could have better returns? This is one question you need to really consider and talking to your financial advisor would be the best bet.
Definite a no-no. However, you will most likely need one for emergencies. Keep the credit to a minimum and avoid using it unless it is absolutely necessary. Practice good habits, use debit cards instead.