Thinking about your child's future can be stressful. It also doesn't help when unprecedented situations like the coronavirus pandemic add to the rising costs and shift global economies.
Therefore, as a parent, you want to ensure you can leave behind a robust financial plan for your offspring to use.
A child comes with many responsibilities, from the minute they are born to when they leave for college. You need to find ways to make ends meet.
A growing offspring has many needs, and it is your job to fulfill them.
While you can't control inflation, you can set up an excellent financial blueprint for your child to follow.
Money is the foundation of a healthy and secure lifestyle.
Even though more than 60% of Americans do not have a long-term savings plan, that doesn't mean you shouldn't either.
So, for the safety, comfort, and security of your kid, here's what you need to do:
1. Write a will
A will is an excellent way to pool your assets, learn about their worth and ensure your child benefits from them.
If you have several material possessions, including properties or a house, you should add them to your will.
However, do not try to draft a will or make estate plans independently. There are several legal jargons involved in the process.
Without a qualified attorney's guidance, you may struggle to address all of them. However, finding a professional legal expert can be a challenge.
Therefore, using the keywords ‘attorney for estate planning near me‘ can help you match with the best certified legal practitioner to settle your affairs.
Like any parent, you want your child to enjoy a good life and have access to their birthright with no qualms.
So, don't hesitate to reach out and seek a professional to guide you through this lucrative journey.
Your will should include the total value of your assets, the percentage that your offspring will receive, and when. Don't forget to appoint a reliable executive to carry out your wishes.
Your appointed executive can also be the lawyer.
2. Take care of your debts
The trouble with loans is they can financially restrict your family. Your child may suffer emotionally, socially, and psychologically when you can't pay for necessities.
For instance, the mortgage, car payments, and even credit card bills may be eating away at your credit score.
Therefore, try clearing your debts as early as possible for your offspring and family's well-being. This will also help elevate your bad credit score to a more suitable level.
Consider consolidating your debts if you have far too many payments to make.
This allows you to merge most of the money you owe into one account so you can make down payments collectively. Consolidation also offers you a lower interest rate, which will act in your favor.
Discuss with your lender what your repayment options are to manage your debts.
3. Instill smart financial habits
A child as young as seven is old enough to learn about good monetary habits. Your offspring should know the purpose of cash, how to spend it and why saving is essential.
Therefore, get your child a piggyback and educate them on its usage.
Even toys like plastic money and a cash register can make a fun educational experience.
Ensure you take your offspring along when you make purchases so they learn how to read prices and match them with their cash.
You can also pay them for the chores they help out with around the house, which will teach about the value of earning.
When your child is older, start a savings account for them and introduce concepts like debit and credit cards.
You can also add to their learning through YouTube videos, age-appropriate books, and answering your child's questions about money. This will help them be a responsible adult when they start making money.
4. Draft several saving plans
Your child will need you to invest in them through different phases of their life. You should try investing your money the minute your child is born.
This puts you in an excellent financial position and gives your offspring a safety net from any monetary distress.
There are several opportunities for you to explore. You can try your hand in stocks, cryptocurrency, and mutual funds. The return on investment should go to different saving plans.
Short-term plans include immediate expenses such as elementary schools, books, toys, and doctor visits. Long-term plans include saving for college, putting aside money for your child's marriage, and emergency funds.
For instance, the 529 plan is a perfect opportunity to put aside upward of $2,000 for your child's college education annually without additional taxes.
If you start early, you can manage to procure over $40,000 before they hit eighteen.
5. Purchase suitable insurances
Insurance is pivotal in taking care of your family against emergencies and accidents.
You never know when you may contract a life-threatening illness, get struck with a natural disaster, or lose your job. Insurance will help you swerve risks and provide the stepping stone you need to get your life back together.
Companies like Gerber insurance offer a complete package.
You can save up for your child's college, get discounts on medical treatment, and even let you set up life insurance for them.
However, before you sign any plan, read the terms and conditions, understand state limitations, and select a suitable premium waiver.
You should also know how much you need to pay to keep the insurance policy valid.
6. Look into a health savings account (HSA)
If you are in a high-deductible health plan, you can look into a health savings account.
This account lets you put aside money for medical expenses with no federal taxes charged during the deposit.
As of 2021, you can contribute upward of $7,000 into your child's HSA.
When your child hits retirement age, they can withdraw the money while paying the regular income tax. In addition, anyone in the family can also contribute to your child's HSA as long as it doesn't exceed the amount limitations.
This helps you guarantee that all future medical expenses related to your child in the long haul get taken care of.
7. Provide your child with the best education
You can't compromise on your offspring's education. The concepts, tools, and knowledge they pick up in school will help them look after themselves.
Therefore, ensure your child attends prestigious or at most high ranking schools with a solid emphasis on academia.
You should also take the time to know your child's interest and help them look into colleges or trades school, which would help sharpen their skills.
Your interest in your child's education will shape them into independent individuals with the relevant traits and qualities to pave their careers.
What more can you want than your offspring to be able to function and live a comfortable life with complete autonomy as a parent.
Your child deserves a fulfilling life that you can make happen. Don't hold back from investing in your offspring's future as a parent.
Ensure you plan every step of their journey from birth to marriage, so your child never has to struggle.
Start by securing a Will and dividing your assets in your lifetime. If you have unattended payment, ensure you settle all your debts as soon as possible.
Part of your child's nurturing includes teaching them good money habits.
You should also purchase adequate insurance premiums, set up an HSA account, and save for all possible expenses your child may incur.
Securing their future also involves providing your offspring with the best education. This will prepare them for an independent life without depending on your support.
As a parent, doing right by your child should always be your priority.