One of the best financial knowledge you can have is how to save money. As parents, we have to prepare for our kids future by saving early. If you think because they are still kids they don’t eat much and still stays with you, then you have to think again as expenses can start rolling in anytime.
Apart from other basics expenses like food, housing, healthcare, and transportation costs, parents need to save now for their children college tuitions and other vital expenses as they grow older and about to leave the house. At savepenny we care about you and your child’s future, so we have come up with some useful money saving tips from financial experts to help you along the way.
It is only logical to start investing early in your kids through saving. As the earlier you start, the more money you tend to save. Some future expenses such as college fund come with a deadline, and it is crucial that we plan for this eventuality. Some special accounts are dedicated for savings for kid’s future. Example of such accounts is the 529 account that allows your money to grow tax-free as long as any withdrawal is used for a qualified educational expense.
Asides the use of the 529 savings account, parents can also use other plans like the uniform gift to minors act or uniform transfers to minors act to save for their children’s college fund. The children can also contribute money to the account and it is required that the parents hand over the ownership of the student account when the child reaches a certain age.
Separate the savings account from a regular account
It is better to have a dedicated account for savings purpose and keep it separate from your regular account. This will ensure that the money is saved where it belongs to avoid any mix-up. Parents can also explore the possibility of opening account from high-yield savings account for money saving as they have the best rate. As parents, we are often emotionally attached to our children, so we can name the account as “my kid’s future.” To motivate us to keep saving and not to touch the money in the account.
Other effective money saving tips for parents
Sell outgrown items and replace with new ones or save the money
As our children grow, we have to understand they don’t need some of the things we bought for them when they were young. Example of these is their crib, stroller, snow gear, and baby car seats. We should try and dispose of them and get reasonable money back for those items. This money can then be used to buy more essential items they currently need or save it instead.
Some employees offer benefits like health savings account or discounts on laptops for children of their workers in high school or college. This can be beneficial to parent’s savings efforts. Know the kind of perks that are available in your workplace and take advantage of it.
Ask if there is extra benefit from your insurance company
Some insurance companies offer additional benefits such as a discount on smart home technology, adding a teen driver to your auto insurance, or bundle some policies together. So, you have to look for insurance companies that offer this kind of extra benefit when shopping for one. By doing so, you get to save more on other important things like your child’s colleges fund.
There you have it, folks. It is good to plan ahead in order to secure your child’s future.