How to Save for Your Baby’s Future?

Welcoming a child into your life is a joyous occasion, but it also brings financial responsibilities. The earlier you start saving, the more secure your child’s future will be. Here’s a step-by-step guide to help you plan effectively.

1. Build an Emergency Fund

Before setting aside money for your child, ensure your own financial stability.

Target: 6-12 months’ worth of expenses.
Where to Save: Liquid funds or ultra short duration funds for easy access.
Why It Matters: Covers unexpected job loss, medical emergencies, or unforeseen costs.

2. Open a Dedicated Investment Account

Instead of just saving in a bank account, invest in growth-oriented assets for higher returns.

Best Options:

Mutual Funds (SIP): Invest in diversified equity, hybrid, or debt funds based on your risk tolerance.
PPF (Public Provident Fund): Safe, long-term, tax-free returns (15-year lock-in).
Sukanya Samriddhi Yojana (SSY): Ideal for a girl child, offers tax-free interest (lock-in).

3. Plan for Education Costs

Education is one of the biggest expenses in a child’s life.

Estimated Cost: ₹30-75 lakh (for higher education in India or abroad).
Where to Invest:
- Equity Funds: Best for long-term growth (10+ years).
- Balanced Funds: If you prefer moderate risk.
- Fixed Deposits or Bonds: For safer options with lower returns.

4. Get a Life & Health Insurance Policy

Life Insurance: A term plan covering 10-15x your annual income ensures your child’s financial security in your absence.
Health Insurance: A family floater health plan covers medical costs, ensuring savings remain untouched.

5. Start a Child-Specific SIP

Invest ₹5,000-₹20,000 per month based on your income.
Gradually increase SIP amounts as your salary grows.
Choose tax-efficient investment options to maximize gains.

6. Factor in Inflation & Rising Costs

A school fee of ₹2 lakh today may be ₹6-8 lakh in 15 years. Always consider inflation while planning.

Final Thoughts

Saving for your baby’s future requires discipline and smart planning. By investing wisely and starting early, you can secure their education, health, and overall well-being.

Would you like help choosing specific funds or investment plans based on your risk profile?

If Yes, download the Miles Wealth app!

Disclaimer: This blog is for educational purposes only. The securities/investments mentioned here are not recommendations.

P.S. If mutual funds are on your mind, check out Miles Wealth! We make investing easy with personalised mutual funds tailored to your risk tolerance and financial goals. No need to be a finance expert or spend hours researching—just invest in funds that truly fit you. Download Miles Wealth today!

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