Parenthood can be a wake-up call for most young couples. Your expenses increase, as does the compulsion to save money for your family’s future. Once you have started a family, your priorities change drastically. Your own personal needs take a backseat and the family’s requirements assume priority.
Investment options for couples require meticulous planning and a deep knowledge about the various financial instruments. Some essential factors to consider are:
Commonly, every family saves what is left of their income after taking care of all their expenses. A small shift in thinking can help you save and invest more and build a sizeable fund for your family. As a couple, you need to arrive at a figure which you need to compulsorily save on a monthly basis and stick to it. Once the savings amount is fixed, you will rein in all your unnecessary spends.
Income - Savings = Expenses
The right time to start saving for your children is the moment they are born. Starting early gives you a clear edge over people who wait longer to start their investments. If you start investing at the age of 25 years and invest Rs.1,000 regularly for the next 35 years, you will have a corpus of Rs.64 lakhs, assuming a return of 12% per annum.
If you start at the age of 30 and invest the same amount for a period of 30 years, the amount you will have at the end of the term will be Rs.35 lakhs, assuming a return of 12% per annum. A delay in investing can be extremely costly for your family.
If you are the sole income earner of your family, you need to ensure that you have sufficient insurance cover on yourself. If your wife is working, she needs to be insured too. The premium that you need to pay will be very low when you purchase insurance at a young age.
A pure term plan gives you a substantial insurance coverage at low premiums. Make sure to include riders that cover critical illnesses, accidents, and disability.
While it is important for young couples to invest a certain portion of your money in equity-related instruments that give you good returns, you need to have sufficient funds in secure investments as well. Fixed deposits for couples offered by banks and NBFCs are a good bet if you are looking for security of your capital and guaranteed returns.
FDs are the best investment options for risk-averse couples. Opt for a company that has a good credit rating and offers high returns on your FDs. For example, Bajaj Finance FD offers returns above 8% on your investment, which is higher than the market average.
It also enjoys ICRA’s MAAA and CRISIL’s FAAA stable ratings. You can also choose a flexible tenor to meet your monetary needs.
You can make use of the FD calculator to arrive at the maturity amount for various types and tenors of FDs. When you are young and productive, it is always better to choose cumulative FDs for couples that reinvest the interest amount, thus giving you the benefit of compounding.
As a young, married couple, there may be several occasions when emergency needs arise. FDs for couples give you the flexibility of availing loans against them at an interest rate that is 2 to 2.5% higher than the FD interest rates. The fixed deposit continues to generate interest for you and you can pay off your loan in easy monthly instalments.
Young couples need to start investing early to take care of their family’s future needs. FDs are a safe investment vehicle for young couples. It gives you guaranteed returns and the benefits of compounding. It also gives you accessibility to funds by way of easy loans.