We all want what is best for our children. In most cases, this means that parents try to ensure that their young ones have a happy and healthy upbringing in any way possible. In today’s current economic climate, it is also necessary for parents to start thinking about their children’s financial futures and trying to do what they can to help them out so that they are financially prepared for adulthood. Our children stand to inherit a weakened economy that does not promote saving. Not only that, though, but wages have been stagnant for years as the costs of living continue to rise. This scenario looks set to continue and will affect our children as they grow up, making it hard for them to secure financial independence on their own. So, lots of parents are now doing everything they can to make sure that their children are prepared for the future from a financial perspective.
So, are you ready to help your children with their financial futures? Here are a few ways you can start to invest in them.
Secure Your Own Savings And Investments Now
Before you start to even consider your children’s finances, it is really important that you take a look at your own and make an effort to understand your own situation better. After all, if you aren’t in a good place financially, you will struggle to try and save some extra cash for your children each month. The first thing you should do is move some of your savings into investments if you haven’t done so already. This way, they have the chance to grow more than what they would if left in a regular bank account. Once you have an investment portfolio in place, you need to diversify it. It’s also good to add some property to your portfolio, including overseas investments like a resale HDB, as this is always a very safe and secure place to invest money. The more forms of investments you have in your portfolio, the more you will find that your money grows by over time.
Write Your Last Will & Testament
You will need to make some preparations to ensure that your children are financially stable after your death. The best way to do this is to write your last will and testament so that there is no shadow of a doubt about how you want your estate and finances split up after you have passed away. Even though your money and owned properties are likely to be passed onto your children even if you don’t have a will, it is still necessary to write one as they are legally binding and there is no way a third party could dispute this inheritance. However, there are other options such as creating a transfer on death deed if you wish to avoid probate that might be a hassle for your children in the future.
Get Plenty Of Life Insurance
One other way you can secure your children’s finances in the event of you or your partner’s sudden death is to take out plenty of life insurance. This is the best way to ensure that your family will still continue to receive and benefit from your income after you have gone. That’s because the insurance will pay out to replace the total of or a part of your usual earnings. It’s really important that you check out a few different possible insurers when you are looking for a new policy as they don’t all cover the same things. As you will no doubt want full and complete coverage to aid your children in the event of your passing, be sure to always read the small print so that you know exactly what it is you are signing up for.
Start Saving For College As Soon As Possible
The cost of a college education is extremely high these days and there are no signs that it is going to become cheaper anytime soon. In fact, it is more likely to continue rising, so goodness knows how much it will be by the time your children are old enough to head off to college! Even though there will no doubt be a few different bursaries, loans, and other sources of help that they will be able to use to help support themselves, it is still a good idea to have plenty of savings in the bank that you can help them out with. So, it’s a good idea to start saving for college as soon as possible. In some cases, parents even start saving while their child is still just a baby or toddler.
Give Them A Solid Financial Upbringing
It will also pay to try and teach your children plenty about money as they are growing up. You should try and instill a solid financial education into them so that they are well equipped with plenty of knowledge and practical know-how once they enter the adult world. There are various ways you can teach young children important money lessons. The easiest thing you can do is to start giving them pocket money once they are old enough, and then they can start to learn about the importance of saving and opportunity cost.
Start A Savings Account On Their Behalf
Lots of parents like the idea of opening an high-interest savings account in their child’s name. This is usually alongside the saving for college, as it can go towards their first car or can be used as a deposit on their first home. You will be able to open the account for them as soon as they are born. Your bank will just need to see proof of the birth to get it all set up.
Consider A Trust Fund
If you are able to save a considerable amount for your children, you might want to also set them up with a trust fund. This is like a savings account, except that they can only access the cash once they reach a certain age. Most parents set that age at eighteen or twenty-one so that their children are less likely to waste the money on stupid decisions.
So, how will you financially invest in your children’s future?
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