“Kids”, human beings that say “no”, run away from you and use up all of your money. They throw tantrums, make a mess of the house and take extra long to get anything done. But they also cuddle with you, play games with you and love an occasional reading time with you. They tell you they love you and look up to you as their hero. And today being Global Hug Your Kids Day, why don’t you take some time to show them how much you love, comfort and support them by giving them hugs that make them feel safe and secure.
But there’s more to Global Hug Your Kids Day than just giving your kiddos a hug or two. While the physical security of your child is important, their financial future deserves some love too. So, while you’re giving out big hugs today, think about these 6 ways you can secure their financial future.
Do your homework
Start by doing your homework on how much money you need to set a reliable financial foundation for your child. You don’t need an accurate number, but a rough idea of all important and necessary expenses.
Their education will be the biggest investment in their future, followed by marriage and children. But feel free to count in as many milestones as you want and estimate the costs accordingly. Ensure to include inflation when you count your cost!
Open a savings account
The simplest most effective way to start saving for your kids’ future is to open a savings account. Did you know that banks have good educational programs? These programs teach junior account holders how money works and how to save it?
Remember that when choosing a bank for your child’s first savings account. Also, choose one that gives attractive waivers on charges.
Create a will
Most parents hesitate to think about what will happen to their kids in case they pass. But you should be proactive and start planning to ensure your child is taken care of and provided for. Look into your real estate, businesses and other assets, create a comprehensive will. Your safest bet is to contact experienced will and estate lawyers who will explain everything you need to know about different wills.
Appoint a nominee
One way to ensure your child’s security is to nominate a responsible person in your life to take care of your kids. The person you name should be reliable because they will get the claim money until the child turns 18.
Talk about investing
Talk to your kids about the basics of investing. It’s not the easiest concept to grasp, but the stock market is a great way to teach them about long-term financial goals. Encourage your child to invest their pocket money in stocks. Do this regularly and over time your kid will build a nice financial portfolio with a ton of experience and knowledge on investing.
The 529 plan
The 529 programs involve a college savings plan that allows parents to put away $2,500 every year towards their child’s education. It’s tax-free, provided you use the money to pay their child’s education expenses. So, by the time your kid turns 18, you will have managed to save $35,000 in your 529 plan.
