The following is a guest post…
Part of many parents’ dream is finding that happy medium between enjoying life and stockpiling finances for their children. It’s a tall task, especially with all of the expenses involved with everyday life. The interesting part of it all is that you don’t have to be raking in the income to put some money aside for your children. It just takes organization and quality decision making over a number of years.
While everyone has a different plan and a unique life, there are some near universal ways to help you stockpile money for your offspring. They’re listed below for your benefit. Even if they don’t apply to you directly or aren’t feasible at this time, the principle of each should help guide you in some way toward your goals.
Offer assistance as long as possible
A simple reality is that the less your children are spending, the more they’re able to save. Helping your children into adulthood inherently benefits your plan to set them up financially later on in life. Whether it’s covering their down payment on their house, or purchasing a home and letting them rent to own until it’s paid off, the options are limitless. The point is that you can be proactive well into your child’s or children’s adulthood without providing everything for them.
Nuts and bolts: Helping your children with basic financial issues well into adulthood can teach them more about the value of money at a macro level. Part of them being financially stable is understanding what it takes to be completely independent, and the act of supporting them longer than normal is a way to teach them this without throwing them off the edge. Keep it reasonable and avoid becoming their financial maid, but be there to provide a buffer between them and all of the expenses infiltrated throughout our lives. They will learn from you as they mature.
Consider dollar-for-dollar in a savings account
One way to directly help your children save money and set themselves up is to match them dollar for dollar in a savings account. You could even open up a trust fund where every dollar they give you, you put three in the trust fund. The scale of contributions obviously varies incredibly from person to person depending on capability, but the value is the same: helping them save money enables them to find financial stability. It also will teach them how to use the resources they do have to expand them. The nature of investing is a challenge for many people to learn, and little informal situations like this can really teach them something about utilizing the money they DO have and turning it into more. Even if it’s yours!
Nuts and bolts: Rather than stuffing all of your money away in a big safe for your children, teach them how to contribute. Motivate them to contribute even the smallest amount, with the award for each addition being your financial support. This is a way to save together in a reasonable and budget-dependent way.
Make sure your life insurance plan is up to date
Life insurance is a multifaceted type of coverage that varies by family and location. The constant, however, is the goal of it. The purpose of life insurance is to guarantee that a beneficiary will receive certain assets and resources at a given time. While you are the only one that knows exactly what life insurance cover will benefit your specific family, this is a critical factor in setting your children up fiscally. Whether you contribute to the policy on a regular basis or in a lump sum, there’s really no way to be safer when future stability is concerned.
Nuts and bolts: Life insurance is the financial cousin to health coverage. You want to have it, particularly if you’re making a concerted effort to usher your children into monetary steadiness.
There are many ways to help take care of your children financially. Whether you’d like to do it on your own or teach them along the way is up to you as the parent. These ideas presented are simply listed to help provide direction.
About the author: Arlene Chandler writes about family budgeting and life cover from Suncorp.