In uncertain times, resilience is the financial superpower every parent needs

As someone who works in personal finance and is raising a child, I know the cocktail of anxiety and aspiration that fuels every financial decision we make. We want to give our children security. But more than that, we want to give them a choice — the freedom to say yes to the college they want, the job they believe in, the city they dream of living in.

At a time like this, when the world is changing faster than ever, the goal is not to predict. It is to build resilience. Financial resilience means that your investments can absorb shocks, cushion your (and your child’s) future and withstand uncertainty, not crumble in the face of it.

The first step towards building resilience is also the most obvious — start early. Time is your biggest asset because not only does it activate the power of compounding, it also gives you the power to absorb risk. So if you start a mutual fund SIP of Rs 10,000 a month in a large-cap equity fund (which has historically delivered over 10 per cent in the last decade) when your child is five, and keep increasing the SIP amount by 10 per cent every year, you will be sitting with a corpus close to Rs 80 lakh when they’re 20.

A disclaimer — past performance doesn’t guarantee future returns, and investing in equities when the world is in tumult may not seem wise. But remember that in the past half decade alone, we have survived a global pandemic, a crypto boom and crash, AI and global conflict. So it’s worth keeping the faith.

Second, consistency over cleverness. In a world full of Telegram tips and viral Instagram reels promising triple-digit returns through technical trading, boring is underrated. The best portfolios are not necessarily the most aggressive or complicated — they are the ones that survive. A mix of equity mutual funds, low-cost index funds, gold, fixed and recurring deposits will be both balanced and robust. Don’t chase trends; put money in what you know and understand — regularly.

Third, consider inflation your permanent opponent. The Rs 20 lakh college fund you thought was generous might only cover one semester in a foreign university by 2035. Education inflation, in particular, tends to outpace general inflation. One way to counter this is to keep reviewing your goals every couple of years and adjusting your SIP amounts as your income grows. Financial planning isn’t a one-time act. It’s an evolving relationship.

Fourth, don’t forget protection. It’s easy to ignore term and health insurance, but if the pandemic has taught us anything, it’s that we are not invincible. Sudden deaths continue to rise with alarming frequency. Data shows that between the years 2000 and 2016, the rate of heart attacks in the under-40 age group climbed by 2 per cent every year. With adequate health and term insurance, you can be prepared for whatever the future throws at you.

Finally, the most underrated form of investment you can make for your child is in their financial literacy. Helping your child understand how money works — how to earn, save, spend, and grow it — will give them a confidence no corpus can. Whether it’s giving them an allowance and letting them make spending decisions, or talking to them about why you chose a particular insurance plan, involving your children in age-appropriate money conversations builds lifelong habits.

If all this feels overwhelming, let me offer some comfort: There is no perfect plan. You will revisit your decisions, course-correct, make mistakes. That’s okay. Financial planning is about giving yourself enough room to respond to the world, not react in panic.

Your child’s future doesn’t need a crystal ball. It needs calm, consistent action. That’s a lesson worth investing in.

The writer, a chartered accountant, is the author of Money Doesn’t Grow on Trees