Many young folks nowadays do not want to follow the predictable life path that the 70s or 80s kids did. I admire them for this. Its good to figure out what you personally want from life and to work towards it, without following some standard template set for you by your family or society.

One question I get a lot is – Isn’t it better for our finances as a couple, to not have children?

Being a DINK (Double Income No Kids) couple seems to be a popular choice.

The answer I give is –having a child or not having a child is a not a financial decision. It is an emotional one. While having a child is a big responsibility, a child also brings a lot of joy and companionship to your life.

This is a bit like a decision to live with your parents when they are old. Or to return to India after a long career in the US. You take these decisions based on what makes you feel happier and aligns with your personal value system. The impact on your finances is incidental.

It’s about choices

Some young people take the decision to remain childless on the grounds that educating a child is an expensive affair. International schools today charge a few lakhs as fees every year. An Ivy League college for under-grad and post-grad can set you back by a couple of crores.

But this is elitist. There are perfectly good CBSE schools whose fees do not run into lakhs. There’s no compelling need to send your child abroad for her under-grad education. So if you would like to have child, but are worried about the money part, there are lot of choices you can make along the way to ensure that your child’s education is affordable. People much poorer than those seeing this video manage to educate their children.

I see a few DINK couples refraining from having children because of the expenses, but lavishing a lot of money on their pets.

Early start on retirement

Suppose you’ve decided to remain a DINK couple for other reasons, there could be one clear financial advantage to it. Most Indians think of their children’s education, children’s marriage, buying a home and retirement as their major financial goals, in that order.

If you’re a DINK couple you can straightaway focus only on two of those big goals – buying a home and retirement. Many traditional folks focus on their children throughout their 20s and 30s and begin to think about retirement only in their 40s. That’s a pretty late start.

Without children to think about, you can start on your retirement plan in your 20s and get to a very decent corpus by the time you’re ready to retire. Research in India shows that you need 30-33 times your annual expenses by the time you turn 60, to retire comfortably. Plan and work towards this goal.

Get insurance

In Indian families, children often double up as a safety net for their parents in their old age. DINK couples need to plan for not having this safety net.

Therefore, it may be good to get adequate term insurance that will ensure that your partner can sustain their current lifestyle if you aren’t around. Buy life insurance in your mid-20s and top it up as your lifestyle improves.

Health insurance is even more important. You can look at three types of protection against health emergencies. You can buy a normal hospitalization cover that will cover surgeries or other medical emergencies. You can buy a critical illness cover that will pay you a lumpsum if diagnosed with a debilitating or terminal illness. You can create a healthcare fund out of your own savings to cover emergencies that your health insurance will not cover.

Be aware of the longevity that you need to plan for when it comes to lifestyle expenses or health insurance. Average longevity in India is currently in the range of 79 years, with women likely to outlive men. But to be safe, it would be good to plan for longevity of 85-90.

Saving discipline

Not having any financial goals relating to children gives you financial freedom. But sometimes, family responsibilities force us to be more careful about our finances. The absence of those responsibilities should not lead to your splurging on depreciating assets and experiences that don’t build wealth.

Therefore, DINK couples more than others, need spending and saving discipline. Start very early on your financial planning process. Sit down and write out your individual and joint financial goals and the time frames over which you would like to achieve them. Save a minimum 15% of your pay right from the outset and invest it. Open NPS accounts, SIPs, RDs that will ensure that you save before you spend.

Hire a financial advisor to keep you on track on your saving and investing goals.

Make the most of double income

One advantage of being a DINK couple is that you can share your living expenses and save more than you could have if you had lived alone or had children. Use this higher savings potential to create two individual portfolios. Instead of pooling all your income, savings and investments into a common account, try to manage them separately. Create two emergency funds, so that you have double the cushion in the event of a job loss. Work towards two retirement funds so that those steep retirement targets are attainable. If your spending habits are very different, maintain separate accounts for your personal expenses while chipping up for shared household expenses .This way you’ll have a much smoother relationship too!

(Host: Aarati Krishnan, Producer & Edits: Anjana PV, Camera: Bijoy Ghosh & Siddharth Mathew Cherian)

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