One thing is clear, it's best to start saving now towards protecting your children’s financial futures as well as their education. Here are a few handy tips to get you started.
Start saving towards their education
One of the biggest expenses that come with having a child is the cost of their education. Fees gradually increase as they progress from pre-school to tertiary school and subsequently university. There is also the additional cost of feeding them nutritious lunches, school uniforms, stationery and transport. Therefore, opening a savings account that is geared towards such expenses is essential. You can start with putting aside an amount that is manageable and works for your budget so that you can keep contributing towards this account regularly.
Adjusting your budget
As your expenses grow, adjusting your budget becomes crucial. Make sure to always review your budget regularly once every three to six months to see if you are managing your expenses and savings correctly. Assessing your budget regularly can also help you see where you can cut back or redistribute your finances to make sure that all your bases are covered. It can also offer enough wiggle room for you to contribute more towards an emergency account to cover emergency expenses.
Take out life insurance
While you may put in your best effort to be there for your child every step of the way, tomorrow is never promised. You can protect your child's financial future by taking out life insurance to protect their educational needs and daily expenses that they will face when you are no longer around to do so. Not only will it give you peace of mind knowing that should you die they will be financially taken care of, but it will reduce the stress on your loved ones too.
However, not all policies are created the same which is why it is crucial to know what features to look for when buying life insurance. Not sure how much life insurance you will need to protect your child? You can use our life insurance calculator to know if your life insurance is enough.
Seek financial advice
Speaking to a financial advisor is advantageous for parents who want their money to work for them instead of the other way around. It is possible to get access to free financial advisors from a bank or an independent advisor to help you make savvy money moves that can benefit you and your child. It can open opportunities for you to find smart ways to invest and grow your money to help reinvest in your child's future. A financial advisor can also help you navigate your way around setting a realistic budget that does not put a strain on you by investing in things that will benefit you.
Help your child become financially literate
Teaching your child to be money smart can benefit you financially and also help them handle money better when they are older. You can do this by teaching them how to save and involving them in the budgeting to understand how you use money. It can teach them the valuable skill of separating needs from wants and how to go shopping around for a bargain instead of settling for the first item they come across. Remember that children learn more from what we do than what we say.