Children are a joy to have. Nothing can replace the love that your child will bring you as they grow.
The expenses that can come along with raising a child, however, can be a different story if they are not planned for accordingly. Here are four ways to start saving for your kid’s future expenses.
Set Up a Bank Account
You can help set up your children’s financial future by starting a bank account in their name while they’re still young.
When they’re old enough to understand the process and interact with financial institutions, give them a dollar or two every week and have them go with you to the bank to deposit it. This will build in them a habit of saving money, no matter how large or small the amount.
Start a College Savings Account
While your children are still young, prepare for their academic future by starting a 529 savings plan for them. This way, once they’re ready for college, the money that they would need to begin their academic future as a young adult will be set aside for them.
These types of savings accounts are excellent because if there are any changes with your job, it ensures that your children’s educational future is not in jeopardy.
Start a Medical Fund
Keeping your child healthy as they grow is imperative to them becoming a productive and healthy adult.
While your children are young, it’s a good idea to start a medical fund for them so that, as they grow, any visits to the dentist or general doctors will be covered from the fund and won’t have to come out of your own pocket.
Because of the various medical check-ups that children required because, at the very least, they’re simply growing, you will find it a medical fund will be priceless to you in your short-term and long-term financial plan. Back in 2003 George Bush signed into law a bill authorizing Health Savings accounts (HSAs). The advantage of an HSA is that it allows tax deductible contributions to the account plus it allows you to take tax-free distributions for medical expenses. In other words, by using an HSA you can use tax free income to pay your medical bills.
Invest in a Side Business
Because there will be various expenses that come up as your child continues to grow, it’s a good idea to invest in a modest side business that you can run from home, part-time.
When you have a side business that is not your main income, then it lessens the financial burden of putting money away for your child and your family’s future. It also ensures that if anything were to happen to your main source of income, you would have some breathing room and not have to worry about finances immediately.
Preparing for the financial future and expenses that your child will bring to your life doesn’t have to be a daunting task and it also doesn’t have to be a stressful one. The key is starting early or, if you’re just getting into the game, starting right now where you can.
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