No matter how old your kids are, you may have already started thinking about how you may prepare them for their future. There are many ways your relationship with your kids might affect your future, but if you are smart with your money, you can use it for your own expenses as well as your children’s.
This can set them up for their own successful financial future going forward. As a parent consider this your duty and have the kids carry it forward as a family legacy.
Help Them Fund Their College Education
Helping your kids pay for college is one of the best ways you can help them out because it can set them up for a successful career.
College can be very expensive, and tuition has only increased over the years, but a good education can really improve earning potential.
One way you can help send your kids to college is by taking out a Private Parent loan.
There are low-rate loans available, so you can help them pay for their education without it being too much of a burden on yourself.
Depending on how much time you have, you could also start setting some money aside to help cover tuition or living expenses.
Fund college expenses based on your ability.
You can look into 529 college savings plans, which often offer tax benefits.
You might ask that holiday or birthday gifts to your child be cash so the money can go into their account.
Consider Getting Life Insurance
Life insurance is one of the more critical insurance types because it can protect your family if you were to pass away.
If your family depends on your income, it’s even more important to have a plan in place to replace that income.
Sudden death is always devastating, but it would be even harder if your family was also left struggling to pay the bills.
If you or your spouse has a full-time job, you may already have some form of group life insurance. It might be equivalent to one or two times your current salary.
Still, it might not be enough to cover your expenses, so you may want to get additional coverage.
Spend some time thinking about how much life insurance you would need to cover your family’s goals.
You might want enough funds to cover any current debts. You may also want enough to support your kids until they turn 18 or have graduated college.
Help Your Children with Their Own Finances
It’s never too early to teach your child how to manage money. If they know how to make their money work for them, they can be successful even on a low salary.
Help them open their own bank account, as this can help them manage expenses.
Balancing a checkbook, depositing money, and using it to pay for their expenses allows them to practice habits to save money as well as the entire process.
It also helps them keep an eye on how much money they have so they are less likely to overdraft their accounts in the future.
This is the best time for them to make financial mistakes because the consequences will not be as dire now compared to making them in the future.
T.L. Morson and Associates, PLLC says
This is certainly a conversation that all families should be having. Financial awareness is sadly a topic that is often not taught in schools or by parents. There are some great ideas in this post. I actually opened a custodial account for my daughter and had her participate in the selection of the investments.