We all want our children to succeed in life—but sometimes it’s tough to feel financially stable. With the ever-rising costs of college tuition around the globe and the fluctuating job market across various industries, it can be deflating to think about the futures our children may have to deal with. The truth is: it’s never too early for parents to start saving money for your child’s future.
Instead of worrying about it later, you begin thinking of ways to start saving more money as a family right now. What parents may not realize is that you first have to get your own finances in order before you can look to the money lessons you are instilling in your children. Before you choose to invest in a long-term college fund for your baby, you need to look inwards first—and here’s why.
Your Future Matters to Your Child’s Future
It may sound counterproductive to discuss you in an overall consideration of cost-savings for your child’s future. But without setting yourself up for success first, you will never be able to help or fortify your child’s financial potential. Even if you are debt-free, you should still actively seek out ways to make additional income and strengthen your financial stability, like investing in a pretax retirement plan or registering for a rewards system credit card.
By handling your retirement fund now, you will ultimately liberate your child from having the financial burden of taking care of you as you age. You should also make sure you have term life insurance, which will give you the peace of mind that your children will be financially secure if any tragedy occurs in the family. Finally, you should make sure that you have filed a will. Even if you already have done so, it’s wise to update it if you have gained new assets or finances.
Next Steps: Saving for Your Child
Once you have taken the proper steps to secure your personal finances so as not to burden your children in future years, you can start thinking about actively saving for your child. It is important to talk regularly about how you can best provide for your child monetarily and keep to a budget, especially if you are saving for a big, long-term investment like college. Nowadays there are a variety of plans for parents, like Education Savings Accounts and 529 plans, that help with saving for college.
In addition to thinking about your child’s future education expenses, you should also save for life experiences. It’s undeniable that education is a privilege that will prepare your child for a great career. But sometimes experiences like a vacation abroad or a cross-country road trip will be just as ‘educational’ and memorable for your family. If you factor these types of unique, ‘priceless’ experiences into your budget, you can expand your child’s mind and create memories together that will last a lifetime.
By first getting your own finances in order and then considering ways to save for your child’s future, you can be sure to provide the best experiences for your child without breaking the bank or falling into debt.