Set Up For Life: Practical Investments For Your Child
We all want the best for our children, and whoever you are, and however much money you have in the bank, looking after your family is always going to be a difficult task. But remember, preparation is always the best thing to ensure that your child has an enriched and secure life ahead of them. So, what are the most practical investments we can make for children, either early in life, or as they are growing up, so they are financially secure, but also, emotionally secure?
Encouraging Financial Independence
This is a very difficult task to achieve, especially if you don’t have it yourself, but encouraging that idea of being responsible for your finances, rather than overspending as soon as you have money to your name, is a skill everybody can benefit from, not just children. And, you can start at a very young age, by teaching them the value of hard work, and reward them for tasks they’ve done, such as cleaning their room. But also, at a young age it’s important to know that if they want something, they have to save for it. And you can instigate this through the old-fashioned pocket-money scenario, and encourage them to save their pocket-money so they can buy their ideal toy, computer game, and so forth. And if they don’t have enough money, they can’t buy the item. This is one of the first life lessons you can teach your child, and it’s vital to get them used to this as early as possible.
Enjoying Emotional Freedom (In Spite Of A Lack Of Finances)
This is probably one of the biggest lessons you can teach anybody. We all feel limited when we don’t have much money, and this is a lesson for us as much as it is our children. But you can enjoy your life and feel free in spite of your limited finances. It seems now we place more of a reliance on material goods than ever before, so this means that we are more prone to taking out loans and credit cards to fund a certain lifestyle. If you can enjoy life without money or learn to live frugally when you are saving that for big purchases, it will give you that balance you need. People find it harder than ever to live within their means, so if we can teach our children this at a young age, this is a habit that will be ingrained in them for life.
Providing Them With The Tools They Need In Life
There are some essentials we need our children to have so they can go and be self-sufficient in a financial sense. Something like having driving lessons is a rite of passage that every child should go through, but there aren’t as many people learning to drive now because they are unable to afford it. In this respect, it’s important to look for the instructors who will charge a set amount for a bulk of lessons. Driving is one of those skills that, once they have it under their belt, they will be able to go for jobs further afield, which gives your child many more options for their career. But before that, education is a priority. If you are putting money aside to save for your child’s college education, you might want to think about putting a little bit more aside than you planned because it seems that now a postgraduate is viewed as the essential qualification to get those dream jobs. With more competition in the job market, it means that children who have specific goals need to do that little bit extra. This means, not just you investing in a college education as well as their post-graduate education, but also earlier in life, you might want to think about additional tutoring for your children. That little bit of extra support may be what they need to pass some crucial exams at key points during their school life.
The Benefits Of Professional Advice
Lots of parents who scrimped and saved over the years for their children’s education were unaware of the variety of resources available to them until it was too late. So, this means you should do what you can do research things like bursaries, grants, loans, or any financial advice that will benefit your child. The 529 college savings fund is one of those accessible in America, where you can put money into it, tax-free, and you can accrue interest without having to pay tax on the savings. This means you got a bit more money at your disposal. The benefit of high-interest accounts is always something to keep your eye on. And yes, it can be a lot of effort to keep moving your child’s money from account to account, which is why most people set up a savings account when a child is very young and leave the money there. In this respect, it’s best to keep your ear to the ground.
Ask Them What They Want
You may be saving up money for what you think is best for your child, but have you asked them what they want? They may not want to go to university because it’s impractical. And, they may want to pursue their own education. And now, this is entirely feasible, with things like online courses and various methods of achieving qualifications without needing to leave your home. On the other hand, they might not want to go down the education route at all, in which case, is it still worth saving up a bulk of finances? Actually, it is. As far as instilling some financial sense into your child, this is the best opportunity to introduce them to making wise investments, from buying a home and renovating it, so it can be sold on, or buying a property to rent it out to people, or looking at other alternative methods of investing. There are some great ones out there, from gold to cryptocurrency. Much like education is an investment into a professional career, learning the ropes when it comes to professional investments without an education is as important. The benefit of speaking to your child and asking them what they want to do once they leave school means you can tailor your practical investments for them to help them achieve their goals. And it’s not just as soon as they leave school that you are relinquished of financial responsibility, you may need to help them with the other key moments in life, from marriage to children.
It is part of your responsibility as a parent to make sure that they are looked after, but part of the challenge is in making sure you give them the tools to look after themselves. By helping them along the way, and making these practical investments, you are encouraging them to understand the value of money as they grow into adulthood, but you can equip them with the tools they need to prepare for financial hardship. Yes, a lot of it is about preparing your own bank account for a mass drought, but if you can help them understand the value of money earlier on in life, this will make the process easier for you, and they will go through life with a more sensible approach to money. So, by helping them with those essential big payments, either from a house to a car, through to the education or non-education, but also helping them to cope better without a fully functioning bank account, this will equip them in more ways than you realize.