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A Checklist to Cover Your Child’s Financial Needs
A Checklist to Cover Your Child’s Financial Needs
03 Nov 2020

Every parent wants to offer their child the best future that they can, which means a lot of financial planning. But where do you start and when is the best time to start putting away money to protect them by creating a financial safety net?

Start saving now

The best time to start putting away money to protect your child's financial future is now. However, it is important to start with a realistic savings goal that you will be able to maintain monthly. Whenever possible, put away a bit more. There are a range of saving and investment accounts that are tax-free and can be used towards a range of their educational needs. Speaking to a financial advisor can give you tailored financial advice that can be suitable and sustainable for your finances in the long run.

 

Pay off debt

There is good debt that can help with credit score and boost your chances of receiving a loan for important things. But there is also bad debt which takes away from your financial future along with your child's future. Start small by gradually paying off the small amounts of debt and make your way to the bigger debt. The sooner you pay off your debt, the more money you free up to use towards your child's needs.

 

Set financial goals

Having a budget along with financial goals can make putting aside money for your child easier. It can also create a realistic picture to help you avoid putting a strain on your finances. Your financial goals can range from anything such as covering your child's basic needs, educational needs, or even helping them be independent once they have finished school and enter the workspace. It will require discipline and adapting your finances to find your sweet spot.

 

Create a financial safety net

A financial safety net is an investment that sees you spend most of your time putting away money that can come in handy, especially when you need it the most. A good place to start is to have life and funeral insurance in place to ensure that their financial future is protected even when you die.

 

Emergency savings account

Having a child means that there will be a lot of emergency expenses that will pop up. Not having emergency savings in place can cause unexpected expenses to take a chunk out of planned budgets or even cause many parents to dip into their savings. This can easily lead to a spiral of 'borrowing' money from savings that becomes harder and harder to replace or spiralling into debt.

 

Always remember that your situation and financial goals are different from the next parent, which is why it is crucial to seek professional advice. Speaking to a financial advisor can help your financial plan according to your finances and help create practical solutions that are healthy and maintainable in the long run.

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Terms and conditions apply. Eligibility, cover and benefits are determined on individual risk profile. MiWayLife is an authorised FSP (No. 45741) and its product offering is underwritten by Sanlam Life Insurance Limited, a registered long-term insurer. MiWayLife is a division of Sanlam Life Insurance Limited - Reg No. 1998/021121/06