When it comes to having children, it’s a happy occasion. However, it comes with a lot of responsibility. Aside from caring for them, feeding them, and helping them enjoy life, there are financial responsibilities that you must tend to. They go beyond the basic necessities and can extend to life outside the home, including education, savings, and retirement. When family planning, many people want to know when to start saving for your child’s future? Find out that information below.
When Should You Start?
When it comes to when you should start saving for your child’s future, I would say it’s never too early to start. I do not have children yet, but my child does have an account with designated funds just for them. It’s best to start funding the account when you decide children are in your future. You can designate funds into a savings account and let it build up before the child is even born. If you are late to the game, start right now.
Which Savings Account Is Best?
Which account you should open for your child depends on their age. In the early years, a high yield-savings account works bests. It’s very low risk and gets you used to save consistently. Consult your budget and allocate weekly or monthly automatic deposits into the account. Set and forget is the best strategy. Once you are comfortable with the initial savings, you can venture into other types of accounts. I like custodial investment accounts. It allows you to make investments on your child’s behalf. Take that time to teach them about the stock market. When they can grasp the concept, incorporate them into making stock picks. Eventually, they can run their trades through programs like the Youth program with Fidelity.
When they become of working age, look into starting them an IRA account. Funding that accounts early for several years can set them up for life at retirement. I believe if you start saving $3000 in that account between ages 15-20 and never invest another penny, your child will be close to millionaire status at retirement age. Aside from setting up an IRA, if your child plans to attend college a 529 plan could also be useful.
Having a child is hard work but fun work. When it comes to your child’s future, don’t forget about it. Instead, set them up financially at a young age with savings and investment opportunities.
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