What is that one thing we married Indians cannot escape? No, the answer is not annoying big-nosed dur-ke-rishtedar always minding our business and never their own and not that mohalle wali aunty always peeking into our houses and eavesdropping for the weekly neighbourhood gossip! It’s the constant question of ‘ When are you having a baby?’ or ‘When are you starting a family ?’ and that ‘Pota-Poti ka muh kab dikha rahe ho’ from your inquisitive but pushy parents and grandparents!
About the author: Ajay Pruthi is a fee-only SEBI registered investment advisor. He can be contacted via his website plnr.in. Ajay is part of the freefincal list of fee-only advisors and fee-only India.
Well, to be honest, a lot has changed over the years. Parents are becoming open to the idea of a couple enjoying their marital status for a longer period of time before a baby is brought into the mix. Whether it is urbanization or becoming worldly-wise now most newlyweds are only becoming parents when they are ready for it. But starting a family is not only about being emotionally ready, one has to be financially equipped too!
Here’s how an Indian knows they are financially ready to start a family:
You have a solid financial plan
Before everything else, you must have a plan! Starting a family is not a three-hour Baahubali marathon that you can cherish for a few moments, appreciate the grandeur and storytelling, and switch it off. It is like Kyunki Saas Bhi Kabhi Bahu Thi, going on and on for years and years without a stop with its ups and downs- a complete rollercoaster ride-dramatic, yes, but not as melodramatic as Tulsi’s life! So, you must have a proper plan- from how many kids you want to where you want to raise your family to what kind of school you want to send them to.
From taking into account the child’s extracurricular activities and needs starting from school to college to your own retirement and investment ideas, a proper financial plan that covers all monetary aspects of your family should be on the top of your list of priorities when it comes to family planning.
You put the family’s needs before your own
Now, not everyone needs to be self-sacrificial Parvati from Kahaani Ghar Ghar ki or Mother India at all times, but as a parent, there are sacrifices you have to make for the child and most of the time, these are financial ones! Want to buy that new sherwani from Manyavar for the festive season or VIP tickets for the next IPL game? That Xbox you wanted to play FIFA with your buddies from college? Or trying out sushi from that new expensive Japanese restaurant? Hold your horses! Small spending like these can ball up into significant expenses and lead to budget constraints. If you want to start a family, your kid’s financial needs must be the priority.
You have a fixed budget and can stick to it
We cannot stick to a budget even if our life depends on it. But if you are well-versed in this magical trick, you are one step ahead of the pack when it comes to starting a family! While a financial plan is a long-term goal, taking heed of tiny everyday expenses and day-to-day spending form your budget. Failing to do so can lead to a complete breakdown of the overall financial plan, and even basic amenities needed for the child will be hard to afford.
You have mastered the art of saving
They say one truly becomes an adult when one saves more than one spends! This becomes especially true when we start a family. If you have not mastered the art of savings and don’t have enough to sail through for at least a year without depending on your job, then you are not prepared enough to cater to the needs of a child!
Indian parents usually save money for a variety of reasons – to buy a new house, healthcare, children’s education, their grand shaadis, holy pilgrimages, and their own retirement plans. So, in case you are planning a family, you must be ready to do the same, and in the long run these savings will help provide a blanket of security.
If you are able to live a budget-oriented life, you can save up enough and be ready for all those rainy days that your family might face. In the current job crunch market, unpredictability is a huge factor. If you ever lose your job, you will have something to fall back on.
You can afford life and health insurance
Growing up, we have all heard the highly impactful ‘Zindagi ke saath bhi, zindagi ke baad bhi’! This sentimental tagline of LIC hit Indians right in their feels and still echoes in the minds of us adults and kids from the 90s. For most Indian households, that was their first brush with life insurance. Since then, innumerable other insurance companies have cropped up on the scene with their term and health insurance policies in India. And it goes without saying that if you are planning a family, you must have enough financial resources to afford health and term insurance.
The first few years of an infant’s life are the most fragile and would require constant vigilance from parents and costly doctor visits. To make sure child healthcare is easy on the pockets, you must have a decent healthcare plan. Maternity also brings with it several health issues for the mother, whether it’s a complicated birth or postpartum depression, so you should make sure healthcare for the mother also features in your plans.
Raising a child is a long-drawn journey, and your child can face various life-threatening and unforeseen medical issues on the way, so a proper healthcare plan is a must to secure their future.
You have a stable source of income
In India, raising a child is costly if you want to give them a wholesome lifestyle, healthy meals, the best education, the best chance at going to a good college, and encourage and nurture their extracurricular activities – basically give them a well-rounded childhood. Indian parents work hard day and night to make sure their children get a chance at a better life than them. So, if you are considering starting a family, you must start with trying to get a job that pays enough to afford the same. Stability in a career leads to peace of mind about where the next meal is coming from. Put a baby in the mix, and the responsibility is tenfold!
Investments, whether in business ventures or property, also bring in the required monetary stability on a monthly and yearly basis. In all, you should have a stable source of income to maintain your family.
You can prioritise your immediate family over others
Not every Indian household today is straight out of a Sooraj Barjatya movie singing ‘ Hum Saath Saath hain’. The nuclear family is slowly taking precedence over the extended family life. But even then, Indians have not gotten rid of extended family members leeching off each other in the name of familial bonds. Financially, it is a red flag for anyone planning to start a family if they are still forced to lend money to others without seeing a penny of it back!
Not only does it jeopardize the family financial plan, but also leads to missed opportunities in savings and retirement plans. So, you should learn to say ‘No’ to such opportunistic leeches, cut them off and think about your future family plans while trying to lend a hand of support.
You have less loans to repay
So many Indians take personal, credit card, or house loans and then work their entire lives just to pay it off with skyrocketing interests! It is not only physically taxing but also mentally and psychologically stressful. It is okay if one can repay the loan in the near future, but if it takes years, then the additional burden of having a kid and maintaining a family could escalate the costs to such a level that both family life and mental health could go for a toss! Remember, taking care of a baby is not as easy as those adorable Johnson ads make it be- raising a kid is a lifelong commitment with its own set of exhausting expenses, so you must have as little a debt as you can and try to pay off most loans before thinking of starting a family.
You know how to live without excess
As newly minted adults all we think about throughout the month is that paycheck coming through so that we can shop till we drop! But as much as you can splurge as single person or a couple, self-imposed monetary restrictions become important when you start a family! Do you really need that new bike if your old one works perfectly? You don’t! In fact, you can think of various ways you can spend less on oil for your bike since petrol is expensive. Or that 42-inch flatscreen TV for watching cricket when your old one works just fine. In all, you should analyse every aspect of your life and figure out where you can cut costs so that you can save up for your family.
You can invest in nurturing your family
Remember how as kids we all thought we’ll be the next Lata Mangeshkar, MF Hussain, or Sachin Tendulkar? Even though we sounded as good as a broken record on repeat and could not draw a proper straight line to save our lives?
Yes, truly traumatic times and a complete waste of resources but nonetheless it was our parents who nurtured our impossible dreams of greatness! With music, dance, drawing and sports lessons we Indian kids are spoilt for choice as our parents wanted us to imbibe the best of our culture and talent! So, their investment in our extracurricular activities was a major part of growing up. If you are ready to invest in every part of your kid’s and family life so that they have a more wholesome and better future then you are ready to start a family.
But this is not to say you have to say yes to everything that catches the whim and fancy of your family! Nurturing a kid’s talent and knowing where to invest to get maximum benefit for them should be your goal.
Is buying them the new iPhone or Xbox helping them in anyway (except that you will become their favourite parent and they will love you for eternity!) or is keeping that money for their healthcare and college more important? Rewards and incentives work great with kids when you want something in return like a good score in board exams! So, you need to keep in mind how to make every single of your gifts count so that your well-earned money does not go in vain. While it is true we want to give our family the best of the world has to offer, the world does not come cheap!
Final Thoughts. If you have all these qualities and a determined mindset to make a family work with a set financial plan, it is one of the greatest joys of life! But don’t start a family without thinking of the future financial investment and responsibly just because your annoying friends won’t stop posting a million pictures of their gurgling babies on their Facebook and Instagram and you feel left out. Take your time, build your financial credibility and parenthood will be a much smoother ride!
*Disclaimer- Nothing contained in the article is a solicitation, recommendation, endorsement, or offer by me. If you have any doubts as to the merits of the article, you should seek advice from an independent financial advisor. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors. Investment in the securities market is subject to market risks. Read all the related documents carefully before investing.
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Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.
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