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Secure your child’s future: 4 steps you need to take NOW

Millennial Magazine- secure your child’s future

While having a child brings joy, it means plenty of responsibilities for parents.

Additional to the concerns regarding the well-being of children, a plan for a secure future is necessary. From making decisions about their education to planning their weddings, providing children with the best of everything is a responsibility no parent can overlook.

The rising cost of education and decrease in the value of money is a cause of concern for most parents in today’s time. However, before you suffer a financial crisis, it is essential to start planning and investing to secure your child’s future. There is no guarantee that one simple plan can cater to a child’s financial needs.

There are various options and strategies to overcome the dilemma of securing your child’s future even in your absence. Life insurance, setting up a trust fund, creating a will, and most importantly, keeping in mind the hidden costs are tools to ensure your children’s financial security.

Most parents are often confused about how to proceed with financial planning. However, a piece of advice from a financial advisor or an online service will help you decide the best plan for your family. The benefit of financial planning at an early stage is that it allows you and your family the opportunity to enjoy the present without compromising future financial plans.

If you are concerned about the future of your little ones, planning for your investments at an early stage is necessary. So let’s look at some ways to help you get started.

1. Writing will

You can either create will online or seek help from a financial advisor to formulate a plan that ensures the security of your assets. People put off writing wills because they believe it is challenging. Regardless of what you might think, creating a will has benefits that help you and your family in unprecedented times.

A will certifies equal distribution of finances amongst family members. If you die without a will, your valuable assets are passed on to the family. However, these are distributed based on the value of property and terms of title deeds.

A will serves as the legal document for minor children if both parents are no longer alive. Families often face confusion in the event regarding funeral arrangements and asset distribution. A will stating the last wishes of the departed soul in such circumstances reduces stress and heartache for the family members.

2. Pay debts

Before you plan to start a family, you must pay off your debts immediately. Paying debts relieves the burden and increases the family’s financial freedom. One of the effective ways to pay debts is through debt consolidation.

Debt consolidation combines multiple debts allowing you to make a single payment which saves time and money. Debt consolidation will reduce the total debt and interest rate if you have bills with different interests. You will save extra money for your child’s bank account with a low annual percentage rate.  Reaching out to a lender or working with a nonprofit credit counseling agency helps pay off debts faster.

3. Teaching Financial Literacy

Developing healthy financial habits early on has life-long benefits. Teaching your kids how to save and spend money positively impacts their financial decision when they grow up.  While many parents do not consider involving children in financial decisions, youngsters must understand the dynamics of handling money.

Financial literacy teaches children the risks of bankruptcy. It prompts them to start saving to tackle money-related problems in the future. Parents should motivate kids to get a part-time job, enforce the rule to repay if they borrow money, and make them a part of discussions regarding financial issues. It is necessary to understand that every child has to start from somewhere. Shedding light on financial matters from an early age will benefit them and their future family.

4. Savings Account

When people talk about investing, it’s either about stocks, foreign currency, or real estate. While these are ways to save money, there are some disadvantages like easy access to cash. Having cash in a savings account is a convenient option to access money in difficult times.

While a savings account has low returns, it has some benefits compared to other investments. There is always a possibility of losing money in different investments over time, but the amount in your savings account will only go down if you withdraw the money. Unlike real estate, you have all-time access to the cash in your savings account.

If you plan on early savings and want to secure your child’s future, a savings account is a good solution.

Conclusion

There is no timeline for when you may find yourself in unexpected circumstances. While many things might not be in your control, your savings are one thing that could help you get out of difficult times. Rather than waiting for unprecedented events, it is beneficial for you and your family to have a financial backup right from the beginning. It is better not to put all your eggs in one basket and seek professional help to manage your finances and secure your child’s future.

What do you think?

Written by Marni E. Goldberg

Marni E. Goldberg is a journalist covering the financial market and graduate of Wharton School of Business. She loves cooking, travelling in her spare time, and spending quality time with her family.

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