According to one cost calculator, however, having a son or daughter can cost you thousands of dollars this year alone. This figure includes the cost of several factors such as food, transportation, housing, healthcare, and tuition fee for an international school in Manila. This number still does not take into account savings for their college education and living expenses they might incur once they leave your home.
So what exactly should any current or aspiring parents do to save some money for their pricey children? Here are some basic tips on saving up for your child’s future.
Start investing early
It is common knowledge that the more years you spend on saving, the more money you are going to have in the end. This is especially true when it comes to future expenses that have a deadline like a college tuition fee or a Manila international school tuition fee.
Investing your money early allows it to grow and gives you a steady source of withdrawals you can use for any educational expense. There are a lot of companies that offers investments or you can avail an educational plan for your child that you can claim once they go to college.
You can start investing your money as early as you want. You can even get your kids to contribute a portion of their own money to add to the fund as well. As a parent, remember that the earlier you invest, the better.
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Use separate accounts
Set up a savings account that is separate from the accounts that you regularly use. Doing so can help you keep the money in the account where it belongs. Some investment experts suggest using a high-yield savings account at a bank insured by the FDIC for the purpose of saving up for the future of your children.
You also need to find a bank that can offer you the best rates possible which is somewhere around 1.5 percent APY or more. It is also recommended for you to try and give a nickname to your account. Research has shown that giving you savings account a name like “My Baby’s Fund” that is meaningful can help create an emotional connection with it. This can then help motivate you to keep saving.
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Sell as your kids grow
One of the reasons that raising a child can end up costing you a lot is that they almost always grow out of the things that you have bought for them. Unfortunately, a lot of the things you buy for your children such as a car seat with all the latest safety features or warm snow boots for this season have a shelf life.
Luckily, there are now many different services out there that allow parents to offer and sell the items that their kids have outgrown. If you time it right, you can even get the best value for certain items you sell depending on certain times of the year. You can buy new or used items that your kids may need right now with the money you earn from selling those items. You can also simply save the money away.
Key Takeaway
Thinking about the future of your child can be scary for almost any parent. Don’t let this fear consume you, though. Just set attainable goals and try your best to commit to them.
Being prepared for the future rather than facing it head on without being ready is a must for any parent. It is your responsibility to provide your child the best chance in life and guide them in those moments where they need you the most. Being financially ready will give you a head start with that.
Adopt a “savings first” mindset and do your due research when looking for investment options available to you. Keep in mind some of these tips and maybe the thought of giving your child a comfortable life in the future can be a little less intimidating.
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