Good parent that you are, you want the best for your child—and it doesn't come cheap. Food, clothes, books, toys, camp, sports, lessons, great education, the whole works. A great chunk of your family finance is spent on your children. Kids are expensive, full stop. The only way to not get stranded or overwhelmed by it all is to begin putting money away for the future. Beating the uncertainty of the future means planning with the certainty of the present. You might win the lottery tomorrow, or your spouse might lose their job and go broke. But with a great saving system in place, life's uncertainties will not affect your children and the great legacy you're building.
So what are the best ways for parents to sock away cash for their pricey progenies? We have curated the best tips from family finance experts to share them with you below.
Check Out The Best Ways To Save Money For Your Child.
This five-step approach will help you save the finances your child will need to set them on the path of financial self sufficiency.
Start Now
The more years you spend saving, the more money you'll have. This is very important if the money in question will fund your child's university education. In that case, starting early is not a choice. When it comes to saving and investing, there's not time like the present. Nor is there a right time. Starting now gives your money a longer time to grow. you can also deposit small amounts weekly or monthly. Stop waiting till you have a lump sum.
Save What You Can Afford
Whatever amount you decide to save regularly, make sure it is substantial enough to meet one or more need of your child. Also, be sure that it fits comfortably within your family's budget. There's no point in setting money aside if an urgent need will make you go right back to it. Finally, this amount shouldn't disturb whatever personal savings plan you have going on for yourself. Because in as much as your child's future is important, your long terms needs are also important. If you need help compartmentalising your money, feel free to consult a family finance expert, or an accountant.
Open An Account And Keep Things Separate
It's not very practical to lump all your savings in one account. Open an account for each child, and keep money for each one in them. Let this account be separate from your personal savings account, and let it also be separate from any family joint account. It requires a lot of discipline, and dedication, but you can do it. There are several types of accounts to choose from. Target savings accounts are high interest accounts and help you to save with a particular target in mind. There are also several investments accounts to suit your need, whatever they are. Walk into your nearest bank and have them help you make some informed decisions.
Get A Boost
You can boost your child's savings by receiving a grant, scholarships, or any additional funding from unexpected quarters. For instance, if your child participates in a competition and wins, most of the prizes are often in grants and scholarships. They will help boost your saving. Encourage your child to do better and be the best. You could also boost your savings by trading in some of your children's old things, as they grow. When they no longer need a car seat, you could sell the car seat to someone else, and save the money that was paid for it. The same goes for baby beds, high chairs and all those really pricey things your child no longer needs.
Make Your Savings Flexible.
What happens if your child decides they're not attending university? What if they want to bake cakes for a living? The world is certainly going the direction of skill trumping education.You can buy some life insurance in their name, a piece of land that most certainly will appreciate, or you could invest in treasury bills or government funds. All of this is geared towards ensuring that your young adult is financially independent.
Teach Along the Way
Your saving efforts can also present opportunities to teach your child about money. They're going to be on their own at some point, so why not set them up for success? Teach them the value of money and help them set realistic expectations. Involve them in the whole savings process. Start early by introducing a piggy bank.
A child who knows that value is attached to every naira, and that money doesn't just grow on trees, is a child who will grow up to ease their parent's pressures in the coming years.
Taking these steps can help give your child more choices in life and, ultimately, set them up to achieve greater financial independence.
Resource: Woman's Day
Also read: How not to raise entitled kids
