Open up a saving account that accrues interest and is dedicated to solely saving for your child’s future. Fidelity Investments has excellent resources to help you plan how much you would like to put aside. In the beginning, start saving slowly; as your child gets older, increase the amount. This method will help you out with your monthly expenses. Now, you can invest whatever you like, but realistically, consider your monthly expenses. Understand that your child might not want to attend college and have other plans. Plus, the price of college might change when your child comes of age, or your family could face hardship. There are so many life factors that come into play while you’re planning for the future. Save accordingly, and don’t touch it.
Teach Financial Literacy
Teaching financial literacy can be a learning opportunity for the whole family. Investopedia has terrific activities to teach children about financial literacy. Begin implementing everyday actions that encourage saving and budgeting for the entire family. Use methods like sink funding for everyday purchases and give your child an allowance when they get older. Again, life factors can always throw a monkey wrench in plans, but if your family becomes disciplined early, nothing can stop you from saving for your child’s future.
Evaluate Your Child’s Goals
When your child reaches high school, sit down with them and discuss possibilities. Don’t start discussing money; discover what they want to achieve. Further talk about what lifestyle they would like to have. Express honesty while talking with your child if they elaborate on living a fancy lifestyle. Make them understand that it will be a lot of hard work to maintain a particular lifestyle and go through options. Now, asking anyone what they want to do is a jarring question. No one, including yourself, knew what you wanted to do for the rest of your life. The conversation can remain practical when you discuss lifestyle and how to maintain it. Make sure to understand that the money saved over the years is an investment, not a promise. Your child has the right to spend the savings however they may choose. Always remain supportive and embrace their growth.