As inflation rises and cost of living up goes up, one can't help but to wonder how to chart out a financial roadmap that ensures a complete financial safety to the family. Every father must prepare himself financially and create a financial buffer around them to lead a comfortable life. Here are some money saving tips that every dad should follow.

1. Start saving early and live within your means: In today's volatile economy, employment has become uncertain, even if you are at the peak of your career. The next downsizing or lay off may be around as companies shift their strategies in a bid for survival. So spend wisely. Ask yourself if it is absolutely necessary to upgrade your mobile phone or trade your old car for a new one. That should give you some flex to save. Consider raising your voluntary provident fund contribution as it acts as a brilliant tool to meet emergency expenses.  Since it is locked in and tax efficient, it gives a decent enough yield. Start saving at an early age as money grows! Einstein is rumored to have said that the most powerful force in the Universe is compound interest. Hard to argue with that Brand name and IQ don't you think?

2. Saving money is a routine: Kids consciously or subconsciously adopt habits from parents. Hence, like any other pattern, train them to save money. Create a bank account in their name and allow them to use it for their pocket money. That acts as a good training which later becomes a routine.

3. Plan in advance for milestone goals: It won't be too long before your toddler is off to play school or your daughter knocks at University doors. And you want to move to your own house. (real estate is always a sound investment to hedge inflation for long term). So start planning for these future events. The future comes up much sooner than what we all think.

4. Know where you invest money: Money can be parked in different tools like equities, term deposits, PPF etc. Each tool has its salient features that can be leveraged. If you are contemplating long term (horizon of 5-10 years or more) consider stocks and equity. Over a longer period, Equity as an asset class gives you the greatest chance of beating inflation. Many experts have many formulae, but simple rule - 100 minus your age is the amount that is reasonable for taking equity risk chasing return. Others include investment plans in mutual funds (SIPs), EMIs on Home loans rather than rent, or even Bank deposits which are better than leaving cash idle in savings accounts.

5. Buy an insurance policy: Protect your home contents, buy a vanilla medical reimbursement policy, and certainly insure your life. The simple goal is to ensure that your family's quality of life at least as regards living expenses is the same whether you are around or not. And the sooner you take term insurance, the lesser it will cost you. 

(Contributed by T R Ramachandran, MD & CEO www.AvivaIndia.com)