Financing education for kids' future is often an afterthought for many parents, but it might be the most important decision you make for your children
New parents face a lot of firsts while they wait for their new family member to arrive. Once you're done saving up for a new home, you have to start thinking about financing education for your kids' future. That means a lot of compromises and cutbacks that are difficult but definitely worth it. If you're a new parent waiting to welcome your bundle of joy or raising a young child.
4 ways you can start investing and planning for financing education:
Adjust your spending plan to fit your needs
Making a plan for spending and saving money may seem like a no-brainer. However, there is more to managing cash flow than just putting money aside for large, up-front expenses like a baby's medical bills, hospital stay, clothing, furnishings, and equipment for the nursery.
It's always smart to put money aside in anticipation of unexpected charges. But remember that raising children also adds a steady stream of new expenses like financing education to your monthly budget.
Cut down on expenses
There should be some breathing room in the family budget for the new family member. So, expectant parents should make some sacrifices now and save or pay off debts as quickly as possible.
Parents should also check with their health insurance provider to see what costs can be covered and what they have to pay upfront. They should also evaluate their parental leave policies and decide how to make the most of them. Should both parents take their benefits at once, or should they be spread out over time? Discuss with each other how much unpaid leave either of you is willing to take.
Start investing as soon as you can
When it comes to their children's futures, many parents put off starting a savings and investing strategy until much later in life. If you wait until your children are 10 or 15 years old to start putting money towards financing education for college, you're letting all the time you have now go to waste.
Now is the perfect time to save for your children's future. The first step in establishing financial security is to create a savings or investment account. You can also look into mutual funds and enjoy the benefits of compound interest.
Mutual funds are a way for investors to pool their resources. The money is invested in the stock market by a professional who also handles the account's day-to-day operations. You can see your money grow over time by opening a mutual fund for your kids and contributing a small amount regularly.
Give your kids a piggy bank ride
Giving your children a piggy bank and teaching them the value of saving is a good place to start teaching them financial literacy. Encourage your kids to put their money and loose change in the piggy bank until it is full. Tell them the money is for their future and that the more they collect, the more money they'll have later on.
Many parents avoid discussing money with their kids for fear of adding more stress to their lives. However, if you show your children the ins and outs of financial management, they will grow up to be responsible adults. Hopefully, they'll carry these economical practices into adulthood.
To learn more about personal finance, financing education, and saving strategies, check out Calle Ocho News. Find out how to enjoy life in Miami on a budget and more on the latest events and activities happening in the city by subscribing to our newsletter.