How often do you hear your parents’ comment – ‘At your age I was already a parent to two children?’ This is isn’t just some sermon that our parents wish to give us but is fact! While our parents and grandparents got married and had children in their early twenties, the trend today is turning towards considerably later marriages further pushing the age at when we become parents. The younger generation today is more focussed on establishing their career before getting into long term commitment of marriage and having children.

While being financially settled before taking on responsibility of raising children is a wise decision, becoming parents well into your late 30s comes with its own set of obstacles that can throw you completely off your financial plan.

• Retirement from your work but not yet retired from your responsibilities

  Children of individuals who became parents in their 20s are most likely to be settled by the time their parents approach retirement. On the other hand, if you become a parent in your late 30s, you are most likely to be in your late 50s or early 60s by the time your children are financially settled. This means that the incidence of high value expenses such as your children’s higher education or their marriage can coincide with your retirement years. Managing such high expenses on your retirement income can be difficult if not planned for in advance.

• Managing rising personal health care expenditure along with children’s expenses

  Lifestyle and age-related illnesses are on the rise today. By the time we are in our 50s most of us may be riddled with a variety of medical issues. Long term high value expenses of your children can also coincide with your rising medical costs as your age increases

• Shorter investment tenure

  These factors coupled with the fact that you are likely to be left with a shorter investment tenure to plan for these expenses can augment the financial difficulty that you may face.

Do not get overwhelmed however as these pitfalls can be overcome by tweaking your financial plan to account for these eventualities. In fact, you are likely to have a considerable benefit of being better settled financially when you start a family that can actually be a big boon for you. Consider these points when your family planning begins later in life:

1. Like planning for any other milestones, the best approach is to be pro-active and start financial planning early even though you may begin family planning later

2. In sync with pro-active financial planning, begin your retirement planning earlier in your career when you do not have to incur expenses on family and children. This way you can re-allocate money towards children’s’ expenses when you already have a base retirement corpus set up

3. Once you start your family, try to cut back on unnecessary expenses and step up your SIPs to make up for the shorter investment tenure

4. Look towards funds that are structured specifically to take care of child expenses

5. Ensure you have your insurances in place. A robust health insurance plan to take care of your old age medical needs and a good life insurance policy to secure your family’s future

Making a few changes in your financial planning can put you on a path of stress-free and happy parenting!

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