In the exhilarating journey of parenthood, steering your child towards financial security is a crucial aspect of ensuring a bright future. Here are some insightful tips on how to embark on this financial journey, enhancing your child's life along the way:
1. Sow the Seeds Early With A Savings Account
Introduce your child to the world of financial planning by opening a savings account in their name. Many banks offer special savings accounts for minors, fostering financial responsibility from an early age.
Tip: Do your research to ensure that you are finding the best bank which caters to the growing needs of your child. We decided to enroll our children with a credit union due to the access to a variety of benefits such as attractive interest rates and most importantly, access to scholarships and awards. Start with a small commitment each month to make it manageable for yourselves - something is better than nothing at all!
2. Cultivate Education Funds With An Endowment Plan
Consider investing in an endowment plan tailored for your child's education. These plans not only provide a disciplined savings structure but also guarantee a lump sum amount when your child reaches college age. It's a sail towards a smoother educational journey.
Tip: Again, shop around to find the best rates possible. We opted for endowment plans with two providers - one had a slightly better return which we only discovered because it was new to the market. Also, select a payment schedule that works for you, we pay yearly on the boys birthdays as it offers a better rate than a monthly payment which also allows for a better return on your investment.
3. Teach the Value of Money
Engage your child in discussions about budgeting, saving, and smart spending. Assign them age-appropriate financial responsibilities to instill a sense of financial discipline and independence.
With the help of financial literacy resources such as books you can equip and your child with financial literacy which can make the learning process enjoyable, ensuring your child grows up financially savvy. Here are some of our favorites:
"Alexander, Who Used to Be Rich Last Sunday" by Judith Viorst
"The Berenstain Bears' Trouble with Money" by Stan and Jan Berenstain
"Lemonade in Winter: A Book About Two Kids Counting Money" by Emily Jenkins
"A Chair for My Mother" by Vera B. Williams
4. Consider Insurance
Secure your child's financial future by investing in life insurance plans. While it can be difficult to think about a world in which you are no longer there - it is an important tool which can serve as a safety net, ensuring your child's well-being in the event of unforeseen circumstances.
The payout from a life insurance policy could potentially cover a variety of things you'd like your survivors to have, such as a mortgage or even their education.
5. Explore Savings Challenges:
Make learning about money fun with savings challenges. Create incentives for your child to save a portion of their pocket money, fostering a sense of achievement and responsibility.
By navigating these financial waters with thoughtful planning, you're not just securing your child's future – you're providing them with a compass for a lifetime of financial success. Set sail on this exciting journey, and watch your child's financial horizon expand!