In India, many couples have dual incomes and no kids, which opens up unique opportunities for securing their financial future. From carefree unmarried days to the responsibilities of marriage, and even without children, the right financial choices depend on their current life stage. In this blog, we’ll explore simple strategies to make informed decisions and build a secure tomorrow, whether both partners contribute equally or share the financial responsibilities. Let’s embark on this journey of financial security together!
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What is dual income, no kids (DINK)?
DINK stands for Dual Income, No Kids. It is a term used to describe a couple who are both employed and do not have any children. DINKs typically have a higher disposable income than couples with children, which can give them more financial freedom to invest.
In India, DINKs are becoming increasingly common as more and more couples are choosing to delay or forego having children. This trend is being driven by a number of factors, including rising costs of living, increasing career opportunities for women, and changing social attitudes towards childlessness.
DINKs who are interested in investing can take advantage of a number of different investment options, including stocks, bonds, mutual funds, and real estate. They can also use their higher disposable income to save for retirement or other financial goals.
Types of DINKs
Double Income No Kids (DINK) depicts the situation when both spouses are earning and they have no kids. There are many types of DINKS, including couples in their 20s, empty nesters, and same-sex couples.
Here are two of the most important features of couples in the DINK category –
- They have a high disposable income
Disposable income is actually the in hand salary received. Since there are two sources of income, DINK couples have a high disposable income. They, thus, have a high investment potential and can invest in a variety of avenues.
- They have low responsibility
Since a child is not in the picture, these couples do not have to plan for their children’s financial safety. As such, their responsibilities and liabilities are low.
Strategies for securing your financial future
Do you too fall in the DINK category? If yes, do you know how to plan your investments?
With a high disposable income and a variety of investment choices, making a financial plan seems confusing. Does it not? Worry not! Here is a guide for you to chalk out a good investment plan:
- Create a contingency fund
This should actually be the first item in your financial portfolio. A contingency fund is required for those rainy days when you need finance. For instance, either one of you can face unemployment. In that case you would require funds to maintain your lifestyle, wouldn’t you? Or you might face a financial crisis and need funds to come out of it. Whatever be the contingency, the bottom line is that you should have a sufficient contingency fund. Ideally, a life insurance policy and a fund equal to six months’ wages should be set aside for contingency.
- Buy health insurance
Another important requirement is a health insurance plan. The rising incidence of diseases and the inflating medical costs necessitate a health insurance policy. Otherwise, despite the high disposable income, your finances suffer a threat in case of a medical contingency.
- Get equity exposure
Equity investment, though fraught with risks, yields attractive returns. Since you have no kids at present, you can easily afford to take risks. Ensure that at least 60% of your investment portfolio has equity exposure. Invest in equity shares directly or go for mutual fund schemes. Whatever you do, get equity exposure and grow your savings.
- Start retirement planning
Surprised, are you? You must be thinking why retirement planning when you are so young. Well, if you want to build a substantial retirement corpus, the trick is to start young. By putting aside a little amount from a younger age, you let the power of compounding work wonders to your investments and create a considerable corpus. When you have kids, your financial priorities would change. You would have to provide for the child’s financial safety. At that time, investing in a retirement fund would be the last thing on your mind. If you, however, start now, with small amounts, you can continue your investments till you retire and get a good corpus. If you don’t believe me, look at the numbers. Rs.5000 invested monthly towards retirement for 35 years (considering you are presently aged 30 years) at a very conservative interest rate of 8% would yield a corpus of Rs.1.15 crores (approximately). Doesn’t planning young have its benefits?
- Create assets
Buy a car and a home. Due to double earnings, paying off the home loan would be easier. While you would afford your home loan repayments, you would also create an asset for yourself.
Conclusion
The DINK stage is a very beneficial stage as you have little or no responsibilities and the income earned is also high. Plan your finances properly and you would never face problems later when you have children, start your family and shoulder greater responsibilities.
