Financial planning as a non-resident Indian is tricky to navigate as NRIs are subject to different taxation norms and must invest accordingly. When you add the fact that the future of your children is at stake, it can almost feel intimidating. Whether it be better income, more opportunities for your career, or just your preference that led you to move abroad as an NRI, you might still decide to return to India post-retirement. However, it is likely that your children might not make this decision for themselves. So, if you’re looking to secure your children’s financial future as an NRI, here’s the blueprint that may be considered for your financial plan.
NRI investment plan
● Get insured:
Dealing with unforeseen risks can be among the biggest drains on your finances. One of the preferred way to reduce a sudden blow to your families’ expenses when life throws a curveball is to get a life insurance policy or term insurance plan. Insurance can ensure that your children are financially secured in your absence. A comprehensive life insurance plan can ensure that your family is not riddled with debt in case of your unfortunate demise.
● Avoid liabilities:
When it is time for you to support your child’s learning, the last thing you’d want is to be in debt. Start assessing your day-to-day expenses and assess all forms of debt you might have currently. Be it repaying a loan you took out for a trip, or monthly EMIs for a new car, aim to get rid of all these liabilities as quickly as possible to get started on securing your children’s financial future.
● Map your financial goals:
Try to account for every financial need your family will encounter in the future — from educating your children to them getting married, travelling, , buying a house, and more. When you list down each of these goals, estimate a ballpark figure that you think the cost of these would be. The more precise you are, the better the financial plan will be in your mind. This can help you come up with a financial target that you can then set your investments around. Come up with the timeframe by which you wish to reach these goals and how much risk you are willing to tackle to hit these targets.
● Systematically invest in diverse instruments:
Now, with your financial target in sight, and risk appetite clear, you can begin your journey of systemically investing in products that will help you reach your goal. Ensure you pick instruments that help you get where you want to be in the time you plan on reaching there. With a meticulously devised strategy for diversification, your investments will aid you in your wealth creation process. Be open to adjustments along the way as your circumstances and goals can change.
Plan for your child's expenses
As an NRI planning their child’s future, it's crucial to plan for the big expenses your child will likely need to make as they settle into their adulthood. Whether it is funding their university costs or helping pay for their mortgage as they study abroad, you want a clear idea of what you can expect to pay for when planning your child’s financial future. The sooner you choose to invest, the more flexibility you will have in the decisions your child gets to make about their future.
Also, try to get your child involved in this process. Show them the ropes when it comes to financial planning so they understand how they will need to plan their investments when the time comes for them to become fully independent. Teaching your child, the fundamentals of finances and showing them how investments work in real-time is as good as getting an education in financial planning.
How to choose the right insurance plan?
One of the things you can do is insure the finances of your family through a sound life insurance policy. You want to look for a plan with good coverage options, flexible premium payments, and customizability to make sure the policy fits your needs. One of the suitable options you can find is the Bajaj Allianz Life Smart Protect Goal A Non-Linked, Non-Participating, Pure Life Term Insurance Plan that can secure you and your loved one’s financial wellbeing. You can also use the child planning tool available on the Bajaj Allianz Life website to plan your child’s financial future in three easy steps.
Although it may seem challenging at first, the process of financial planning for your children can be simplified down to a few key components. Few of such components may include - Managing your debts, consider getting insurance, devising a financial objective and an acceptable level of risk, and then investing methodically in financial instruments that are in line with these aims.