Motherhood isn’t easy and is considered even tougher for a new working mother. Since working mothers don many hats, their lives are full of challenges, but a financial problem need not be one. Besides, gone are the days when money management was a man’s forte. The modern Indian woman can independently and take the lead in all aspects of life, including money management. This truly reflects in the Aspiration Index Survey, which ranked Indian millennial women higher on aspiration compared to men. And when it comes to her children, she aspires for the best to secure their future. For a new working mother, the challenges arrive on the day her baby is born. So this Mother’s Day, while enjoying your maternity break with your little one and preparing to resume your professional role, here are a few financial tasks you need to focus on.
Your expenses were centered around you and the spouse before the baby arrived. Your weekly hangouts and regular shopping excursions may now strain your finances. With a child comes great responsibility and raising a child requires a long-term financial plan. If you haven’t started till now, create a budget. Work with your spouse to take stock of your income and priority expenses such as EMIs, rent, childcare, groceries, utilities etc. A budget will help you focus your money on what’s truly important and help curb overspending.
Invest As Per Your Financial Goals
Budgeting will also help you create avenues for savings and investments. Create an investment plan that caters to your varied life goals. If you are a new mom and haven’t started with a Systematic Investment Plan (SIP) yet, starting one would secure your child’s financial needs in future. You can start an SIP with an amount as small as Rs. 500. Each investment should be done for a specific goal. Take the time to educate yourself and your spouse about your investment options, the investment markets, and the various instruments at your disposal.
Coverage For Yourself And Your Family
Whether you are a single working mom or not, you must maintain adequate health and life insurance. Your employer may be offering a group insurance cover, but for maximum benefits during a medical emergency, it is advisable to have your personal health insurance cover. A term insurance would ensure your family’s financial needs will be taken care of in case of your untimely death.
An Emergency Fund Is Vital
Emergencies come unannounced, so it is important to have a backup plan in place. Not to scare you, but as a working mother, you should be prepared for eventualities such as job loss, sudden medical emergency, divorce etc. For an emergency fund, park your money in a fixed deposit, recurring deposit or invest in a liquid mutual fund. You should maintain liquidity worth 3-6 months of your current income, and build it up to 6-12 months with time.
Plan For Your Retirement
As a new working mother, retirement may not be your top priority. You would first want to take care of your children and other family members. But to have a happy and peaceful retirement, you should put yourself first and plan a retirement that can take care of your needs in your golden years. Making small, monthly contributions to your retirement fund is a good idea. You can create this fund through NPS, EPS or mutual funds.
Besides all the above-mentioned smart financial moves, save some money for your recreational activities. Remember a healthy mind is key to success and for that it is important to let your hair down sometimes and party hard. But this should be done after visiting your budget and other crucial expenses.
Take all these steps to have a happy Mother’s Day every year.
The writer is CEO, BankBazaar.com