FINANCIAL PLANNING FOR NEW PARENTS

Having children is the beginning of an exciting journey, but also a big responsibility. As a parent, you must nurture and teach your children, and meet their needs. Here are a few tips that will help you prepare for the financial changes that will occur.

1. Replanning New Financial Goals

After your child is born, of course you have thought of many things to support their future. For this reason, it is necessary to formulate new financial goals that can be determined based on the timeframe, for example in the near term it is necessary to prepare for the cost of vaccines and going to the doctor, so it is necessary to prepare health insurance. Meanwhile, the medium-term plan is used for financial purposes that have a span of 2-5 years, such as Umrah expenses or holidays with family. Long-term financial goals that you can plan for such as preparing Education Insurance, Retirement Funds, and so on. As is well known, education cost inflation in Indonesia is quite high, so it is necessary to prepare education funds from an early age. All of these plans can be a trigger for you and your partner to be wiser in managing your finances and to focus on achieving your family's financial goals.

2. Compile a Monthly Expenditure List

This list of expenses will later increase every month, as the baby's age increases. You should also set up funds for vaccines, buying formula, and food and other supplies. To be able to avoid excess spending, you can start by recording a monthly spending plan that is arranged based on a priority scale. Prioritize spending for what you need, not for what you want (the needs vs the wants). Create a simulation by making calculations with tables for each expense (such as diapers and babysitting costs) in a spreadsheet to calculate the monthly expense amount. Don't forget to continue to evaluate the budget and update the budget at least once a month. The goal is so that you can track which expenses are the largest. Thus, you can devise a strategy to cut these expenses.

3. Prioritizing Emergency Funds

An emergency fund is a number of funds provided that are used to deal with various unexpected conditions in life. This means that you will only use these funds when facing emergencies that cannot be handled normally (according to a fixed budget). According to the Huffington Post, at least we should prepare at least six months of living expenses in a special savings account to be used in emergencies. If any of your income streams are stopped or reduced, this emergency fund can support your family until it has a chance to cover the loss or adjust your lifestyle.

4. Adding a Source of Income

If income is not sufficient, saving expenses and increasing household income are two steps to be able to add to your family's income coffers. There are several options to increase your source of income, including:

· Adding a source of income by utilizing hobbies that generate income such as cooking, crafting, graphic design, and so on

· Reconsider whether our motorized vehicles (motorcycles and cars) incur more costs than using public transportation. Can also replace the vehicle at a lower price.

Eliminate unnecessary monthly subscriptions, such as unused streaming services or gym memberships.

· Resell baby items that are no longer used.

The arrival of children is a happy moment for every couple. However, often this makes both parents too excited and forget to manage finances properly. Come on, start planning your family's finances immediately, so that your family's needs can be met properly.