How smart are you in terms of managing your money? What did you do so far to make your money grow? Have you prepared sufficient funds to support your children’s growth and education?
We understand that the rising inflation has been a pressuring factor for most parents as the living expenses of the household have doubled and tripled drastically. However, this is exactly why we need to consider saving and investing.
With proper planning of savings and investments, you will be able to raise and support your children with ease. You can select methods which provide the best potential for returns that exceed inflation, as long as you are determined to start NOW.
In the first episode of our Money-Smart Mama series, we sat down with Helwa Sofni, a licensed financial planner and also a mother of three. Let us walk you through how to have the right money mindset so that you can plan and manage your family finances better.
Q1: What can a Money-Smart Mama do to deal with the cost of raising a child in the midst of the rising inflation?
Undeniably, raising a child in Malaysia can be costly at times depending on your expectations. As parents, we always strive hard to support our children until the day when they are independent.
Starting from their early childhood, we always try to give our children the best education and the best future that we can afford.
Not only might it sound a little overwhelming and daunting, but also seem a little unattainable. Here’s the good news for every mama: You are capable of managing your finances and reach your financial goals successfully under these three conditions:
- having the right mindset,
- starting early with some long-term planning and
- equipping yourself with sound knowledge about finances
So, listening and watching the series of Money-Smart Mama would certainly be helpful to us as mothers to make better decisions about saving and spending our money.
Q2: What are some ways for our Money-Smart Mama to plan for their children financially?
To start off, we as mothers must get our priorities right. This involves you to manage your cash flow well while setting up cash reserves for your emergency needs.
Then, you should start saving for your children through plans like Junior Savings, Fixed Deposit and Child Savings Plan. Some even come with the option to protect your children.
The key to a great saving plan is to start early. The earlier you start to save, the earlier it will be for you to reach your goals.
On top of this, you should consider investing your money after you have reached your saving goal. With proper investment, you will be able to hedge against inflation.
As there are various methods for your investment, it is essential for you to be clear about:
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- your risk tolerance
- the return of investment (ROI) and
- the amount of funds available on hand
so that you do not feel too overwhelmed over the investment you have made.
Q3: Money doesn’t grow on trees. So, how can our Money-Smart Mamas grow their money?
First of all, you can invest your money in a financial institution. With that, you can earn interest from the deposit you make. The more money you deposited, the more interest you will earn.
Greater return will be yielded due to the compound interest. Your money will grow exponentially as you invest your money for a longer period.
Let’s take RM100 and an annual return of 5% as an example.
By the end of the first year, you will get RM105. Next, comes the second year where you start with RM105 and you will then get RM110.25.
Thus, this is how it works: the longer you leave your savings or deposit untouched, the more your money will grow. By now, you might realise that starting early is very important so that you have more time to grow more money.
Secondly, you can practise regular saving. Make money saving your consistent habit by starting small. As long as you are able to save a consistent amount of money monthly, things will flow naturally and your money will gradually grow.
The key to growing your money is having the right mindset.
Q4: How much should our Money-Smart Mamas start with for their monthly savings?
Here’s what every mama should know: we do not need a big amount of money to start our savings journey.
Due to our commitments and also unexpected expenses in life, it is quite challenging for us to put all our income into our saving accounts. While we need to deal with unexpected medical expenses of our children and home maintenance, it is understandable that most of us do not have much to save for their children.
Instead of telling yourself that you can’t afford to save for your children, what you should do is to start small. Even if it is as little as RM10 or RM50, this can help you to take your first step in money savings. Simply get the ball rolling.
On the other hand, if you set an overwhelming saving goal, you will certainly be demotivated and stressed as your goal seems to be unattainable.
Q5: When is the best time to start considering a Child Savings Plan?
You should start a child savings plan as early as possible. So, the answer is definitely now. When you start saving your money early, you will have more time for your money to grow. You will be able to reap more returns as time passes.
By choosing a child savings plan with an option to protect your child, you can be rest assured that you will have sufficient funds to take care of your children through their adulthood. You can also provide your children a good financial head start in their lives.
Q6: What additional advice do you wish to share with our Money-Smart Mamas?
My first advice is to have a financial goal and start as early as possible. Then, you should lead a healthy lifestyle as we have to take care of ourselves and our children too.
Now, the old saying of ‘Health is wealth‘ should not be taken lightly. If you are mentally and physically healthy, you will be clear of your goal and expectations. With that, you will be able to start small and remain motivated to keep moving forward.
Bear in mind that health and wealth go hand in hand in attaining your goals.
Last but not least, you should choose a good savings plan which can provide you an opportunity to grow the savings fund for your children’s future.
Some savings plans even come with the feature of safeguarding or protecting the fund if anything unexpected happens to you. If you are uncertain of which plan or fund to invest in, you can speak to a licensed financial expert for some advice.
He will be able to help you in your financial planning based on your priorities and goals. You will also be guided on the process of financial planning to achieve your goals successfully.
Securing Your Children’s Bright Future with AIA Malaysia
As parents, we always wish to give our children a better head start in life. We wish to support them through their life journey so that they can thrive in any of their future endeavours. With a long-term savings for your children, they will surely be able to lead Healthier, Longer and Better lives.
Your wish to give your children the best is possible with the new savings and protection plan from AIA, A-Life Wealth Treasure. You can help prepare for your children’s financial needs from as early as when he is 14-days old. This plan is also designed to support you as your journey through life together with your children and support them in achieving their dreams.
Being an investment-linked plan, the plan also provides insurance protection for your children. Here’s the extra perk for those of you who start saving early and more for your children: You can be rewarded with up to 12% of your child’s coverage amount.
You can even unlock additional benefits for your child if you sign up for A-Life Wealth Treasure plan, attach the A-Plus ParentCare rider and become an AIA Vitality member. By maintaining a healthy lifestyle, you can also unlock cash rewards for your children.
Your children certainly deserve the best, so start planning as early as possible. You can be their pillar of support both emotionally and financially so that they can achieve anything they aspire to be.
If you wish to know about money-saving tips and family financial management from our group of experts, stay tuned to our next episode of Money-Smart Mama!
For more insightful stories and fun recipes, stay tuned to Motherhood Story!