Top Three Financial Goals For Millenial Parents

Millennials make up the vast majority of today’s parents. They are thereby shaping the future of parenting. New-age parents are rising up to challenges by bringing a fresh perspective to their needs and aspirations.Most needs and aspirations call for a financial commitment and must be converted into financial goals. Fulfilling these financial goals within a set time-frame ensures that these wants have been realized.Here’s a list of top three financial goals for every millennial parent.

1. Children’s Education Education is the most crucial aspect of a child’s upbringing. Every parent wants to provide their child with the best quality of education. However, receiving a well-rounded education in India comes at a steep price.Parents are finding it increasingly difficult to cope with the high-priced fee structures of schools, colleges, and “extra classes” or coaching institutes. Moreover, a child’s expenses aren’t limited to just tuition fees. Hostel expenses, fees for competitive exams, cost of co-curricular activities are only a few of the many costs associated with providing your child with a well-rounded education.Since saving for a child’s education fund is a long-term goal, parents are also required to consider the hidden cost of inflation. Parents can safeguard their child’s future if they adopt a proactive approach and invest systematically from an early stage. Thus, financial planning is instrumental to a goal as essential as funding a child’s education.
2. Retirement Phase By the time one reaches the retirement age, the underlying aim is to have an adequate amount of funds that must last until the very end. The income generated by this corpus must ideally be used to meet regular expenses, while the need to dip into the capital must only arise in case of emergencies.Being financially prudent and prepared for the retirement stage is of utmost importance. This is because the sources of funds, as well as opportunities, to generate income shrink as one enters this stage of life. Considering retirement-planning from a young age is crucial to one’s personal finance management.Retirement may seem a long way off, but the costs associated with leading a comfortable life, free of any financial dependencies on children are far from moderate. Millennial parents must consider making a retirement plan, which takes into account the availability of any pension, its coverage, future healthcare needs, etc.People usually believe that in their retirement phase, they would have to downsize their pre-retirement lifestyle. However, with the appropriate saving strategy and a well-prepared retirement budget, spendings can continue at the same level.
3. Emergencies It is important to save for a rainy day. Millennial parents must consider earmarking some funds for emergencies. Parents must create an emergency fund for unforeseen events. Such occurrences create hindrances in the smooth running of one’s budget.

Unexpected circumstances could range from an accident to a calamity. Especially with a child, there could be several situations where parents might have to make unplanned expenses. Their economic impact could be variable and difficult to predict. A well-framed financial plan is shock-proof as it includes a bulwark for financial contingencies.Financial planning requires a premeditated and systematic approach. Financial goals must be defined in terms of their investment horizon and the amount of money required to fulfill these goals.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.