Raising Kids and Savings: Finance Advice for New Fathers

Image Source: HDFC Life

Becoming a father for the first time is a life-changing milestone filled with joy and new responsibilities. Among these, financial planning stands out as crucial for ensuring your child’s security and your own peace of mind. This Father’s Day, here are practical financial moves every new dad can start with, based on expert advice and real-world experience.

Build a Robust Emergency Fund

Aim to save at least six months’ worth of essential living expenses in a highly liquid, low-risk account.
This safety net helps your family weather unexpected events like job loss, medical emergencies, or urgent home repairs.
Allocate around 5% of your monthly income to this fund until you reach your target.

Adopt a Structured Savings Habit

Set aside 20–30% of your monthly income for savings and investments, adjusting as your circumstances allow.
Use a “three-bucket” strategy: emergency fund (5%), near-term goals (5%), and long-term goals (10% or more).
Near-term goals might include home upgrades or planned purchases; long-term goals focus on retirement or legacy planning.

Invest in Life Insurance

Secure a life insurance policy to protect your family financially in case of unforeseen circumstances.
Consider both term and disability insurance to ensure comprehensive coverage for your loved ones.

Plan for Your Child’s Education and Future

Start saving early for your child’s higher education, using dedicated accounts or investment plans.
Even small, regular contributions can grow significantly over time thanks to compounding.

Prioritize Retirement Planning

Don’t neglect your own retirement while planning for your child’s future.
Explore options like the National Pension System (NPS), Employee Provident Fund (EPF), or other retirement schemes to build a secure nest egg.

Summary

By focusing on emergency savings, disciplined investing, insurance, education planning, and retirement, first-time dads can lay a strong financial foundation for their families. These steps, started early, offer security and set a powerful example for the next generation.

Source: Economic Times, Outlook Money, HDFC Life