Building a solid foundation for your child looks like many things. Having a financial plan in place that will provide and protect them is crucial, but where do you start? We have put together four ways you can get started when it comes to creating a financial safety net for your child.
Have an education plan
Giving your child the right start in life by letting them have access to quality education means having an education plan in place. Knowing how to choose a reliable education plan will be determined on what type of education you would like to give your child.
It also means choosing something that will work with your finances instead of placing a strain on them. You have the option of choosing a tax-free savings account or an education saving plan that is offered by a financial institution to create a financial safety net for your child. Speaking to a financial advisor can help you plan better to make sure that you are getting more value for your money.
What will happen to your child should you die before they reach an age where they are financially independent? Who will take care of them? What financial safety net do you have in place to protect them even if you are no longer around to do so yourself? These are difficult questions that need to be planned for to ensure that your child is protected no matter what.
Having life cover is one of the solutions that many South Africans use to provide for their child's needs. Not only can the payout be used to pay for their educational expenses, but it can be used to take care of their daily living expenses, buying a car or securing their first apartment. Thinking ahead can give you peace of mind knowing that your child is protected even if you will no longer be around to do so yourself.
Small investments go a long way
Making your money work for you instead of the other way around is the core of financial planning. One of the ways in which you can do this is by making a small investment that can eventually snowball into a sizeable investment that can be used towards providing and protecting your child financially. This could be setting aside an amount that you can afford each month and depositing it into a savings account with a good interest rate, investing in shares, or speaking to a financial advisor about investing in a unit trust fund. What may seem like small steps could come in handy when your child needs it the most.
Protect what you are building
When all is said and done, you want to have peace of mind knowing that all you are working towards will be protected and taken care of. Building a financial safety net for your child takes time. And there will be many times where you will have to adjust and adapt your finances to meet the financial goals you have. What is equally important is to have a plan to protect all of this should you die. Having a legally recognised will in place can be done in a few easy steps to protect you and your child. You can choose to have a will drafted for you online or through a lawyer to ensure that your child is protected.