Smart Tips for new parents

I recently read this wonderful article on Jagoinvestor, but having been gone through this experience, I have my own twists to these tips.

In summary, what they propose for new parents is:

1. Review your Life Cover
2. Add the child to Health Insurance
3. Start RD for school expenses
4. Update Nominations in various financial products
5. Register the birth certificate
6. Start Saving bank account for the newborn
7. Buy cloths and toys smartly
8. Don't invest in CHILD plans
9. Have a 24/7 reachable doctor
10. Make baby emergency kit

Here is my take on some of these tips

Review you life cover

Yes this is important point, but why wait till your baby is born. If you are first time parents, here is a warning. Once you baby is born, you would have seriously no time and energy to devote to anything other than "mis-managing" everything. I recommend that why not increase the life-cover during pregnancy itself. It will not only save you time later, but you can also plan your premium payments as per you convenience. 

Adding the child to Health Insurance

Another important point, but note that insurers want a birth certificate as a documentary proof for covering the new born. Hence the first thing you need is a birth certificate. I had posted my experience in getting a birth certificate in Bangalore.

Also it is better to check with your insurer if the newborn is covered from day one. Another important aspect is the coverage for vaccination. The vaccination cost with private doctors can range anywhere from 4-5K to 15K (at-least in Bangalore). 

Update Nominations in various financial products

To me this does not make sense. A nominee is just a custodian of the assets and does not have a rights over the assets. Also a minor nominee requires a guardian to sign on behalf of the nominee. So in the event of your death, the actual custodian of your assets will be the guardian on behalf of your baby until the child becomes adult. So why complicate the nominations, better to have either your spouse or parents as nominee. 

Start Saving bank account for the newborn

I do not think it is a good idea. The simple reason is because most banks which allow kid's account requires a minimum monthly balance, which blocks the money. The interest rates offered is below inflation resulting in loss of money. The alternative option that I recommend is to keep counting the money that the child received via gifts and at the end of year deposit the lump-sum amount either in PPF or a MF. This way the money received by the child goes for building a corpus for his/her future. 

Buy cloths and toys smartly

This is a personal choice, but in case you are not averse to using second-hand toys or baby stuff, then I recommend online portals like olx/quikr to find used items. Another interesting options is to rent the toys via rentoys website. I have not personally used it, but it sounds an interesting concept. 

Make baby emergency kit

There are two problems with having an emergency kit

- It needs to be checked from time to time to ensure that used items are refilled

- It needs regular checks for removing expired medicines 

My personal experience is that despite having the required discipline, we could not always maintain the emergency kit. There were always items missing from the kit. A better option is to have a near-by medical store deliver the medicines to your doorsteps in case of emergency. 

An additional tip for those who can maintain the kit is to have a spare kit in your vehicle for emergency purposes. 

Here are some additional tips

• Invest more in your health and fitness (more important after having kids).  
• Get a PAN card or Passport for your kid as an identity proof
• Create a WILL if you don't have
• Open a PPF in your kid's name and ensure regular investment (no need of a savings account)