Protecting Your Child's Financial Future: The Basics

When you have a small child, it’s hard to imagine them all grown up, and going out there by themselves to face the world. There is a lot for them to learn, but although it seems like you have plenty of time, there’s no doubt it’s going to go quicker than you expect.

Before you know it, your baby grows into a toddler, and then goes to kindergarten. It won’t be long before they turn ten years old, go to high school, and perhaps - we all hope - into university. And that’s it - they are fully functioning adults who will forge their own way in life.

To really protect your child’s future, you need to think about finance. No one knows what the economic situation will be in 20 years time, but with proper planning and education, you can give your little one what they need to survive - and thrive. Let’s take a look at how to go about protecting your child’s future.

Educate your child about money

First of all, it doesn’t matter how much you stash away for your kids in monetary terms if the first thing they do is spend it unwisely. Regardless of whether you have savings for them or not, the most important thing you can do for your child is teaching them to be financially literate. Unfortunately, they don’t teach much of this stuff in school so your child will be at a disadvantage if they don’t know how to balance the books and understand the benefits of saving. It’s down to you to teach them, so don’t shirk your responsibility if you want them to have a secure financial future.

Savings and investment

Putting aside some money for your kids in a  savings account is essential in this day and age. It doesn’t matter how much or how little you can afford, if you want to give them a good start in life, it all helps. They could use this money as a deposit for a house, for example, or even to help them start their own business. If you have extra income, you can also think about starting an investment portfolio. However, as pointed out in this review, investment can be a tricky area of finance for the uninitiated. Make sure you educate yourself before putting your money into stocks, bonds, or currencies.  

College funds

A lot of people spend a fortune on buying the best early years education they can - but forget about putting money aside for university and tertiary education. But here’s the thing. There is a strong correlation between a university education and a higher salary. And there is no correlation at all between choosing the most expensive nursery care and a high wage.  The truth is that there is little to separate nurseries, kindergartens and early years schools as they are all regulated by strict guidelines. Ultimately, your money is far better off being put aside for college fees if you want your child to enjoy a more confident, wealthier lifestyle when they are an adult.

Do you save money for your kids? Why not share your strategies in the comments section below?
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