Unique Saving Strategies for Parents with Multiple Kids

Raising multiple children is both a joy and a challenge, especially when it comes to managing finances. Indian parents often find themselves balancing between saving for their children’s future and providing them with a stable lifestyle. Here are some unique strategies tailored for parents with multiple kids.

1. Start Early with Education Savings Plans

Saving for children education is a big financial responsibility, and the earlier you start saving, the easier it will be. Opt for child education plans from different insurance companies. Not only do these plans offer disciplined saving habits, but they also come with tax-free benefits under Section 80C to the customer. You can also open Public Provident Fund (PPF) accounts for every child so that a considerable corpus is built over time. You have the necessary funds available to provide a good quality education to your children. However, there is an overall investment limit of ₹1.5 lakh per financial year across all PPF accounts held by an individual, including those opened for minors.

2. Opt for Systematic Investment Plans (SIPs)

SIPs in mutual funds are an excellent way to build a corpus over time. By investing a fixed amount monthly, you can benefit from rupee cost averaging and the power of compounding. Based on your risk tolerance, diversify your SIPs across equity, debt, and hybrid funds. Equity funds can offer higher returns for long-term goals like higher education or marriage, while debt funds provide stability for medium-term goals.

3. Utilize Government Schemes

For parents with daughters, the Sukanya Samriddhi Yojana is a beneficial scheme. It offers an attractive interest rate and tax benefits. The scheme can be opened anytime before the girl child turns 10 and can be operated till she turns 21 or gets married after 18. The contributions are eligible for deduction under Section 80C, and the interest earned is tax-free, making it a high-return, low-risk investment.

4. Leverage National Savings Certificate (NSC)

The National Savings Certificate is a safe investment option offering fixed returns and tax benefits. With a lock-in period of five years, it suits parents looking for secure, mid-term investments. NSC investments qualify for tax deductions under Section 80C, and the interest earned is reinvested, compounding over time.

5.    Health Insurance for the Entire Family

Medical expenses can be unpredictable and hefty. A comprehensive family health insurance policy can mitigate these risks. Opt for a family floater plan that covers all members, including a critical illness rider. This ensures that your savings and investments remain untouched in medical emergencies.

6. Invest in Gold

Gold has always been a favoured investment in Indian households. It acts as a hedge against inflation and currency fluctuations. Consider investing in gold ETFs, sovereign gold bonds, or mutual funds instead of physical gold. These options offer better safety, liquidity, and returns without the hassle of storage and purity concerns.

Conclusion

Balancing the financial needs of multiple children requires careful planning and disciplined execution based on the current financial situation, risk tolerance, and long-term goals. By leveraging these unique saving and investment strategies, Indian parents can secure their children’s future while maintaining financial stability. Remember, the key is to start early, stay consistent, and adapt your strategies as your financial goals and market conditions evolve.