How to safeguard your child's financial future

Nothing really prepares anyone for the challenges of having a baby (Shutterstock)

Having a well-paying job, a beautiful house and a car don’t necessarily mean you can afford to have a baby. Getting a child before getting your financial matters in order is one of the biggest follies most parents make. Nothing really prepares anyone for the challenges of having a baby.

They start draining your account even before you can hold them in your arms – from prenatal tests to maternity clothes. As thus, it is vital that as a parent, you understand the expenses that come with raising a child and make plans accordingly.

No parent wants to say No to their child and but how do you ensure you never do? First off, you need to make good of three things while laying out financial plans for your children. You need to assess how much money you’ll need; when you will need it, at what age; and for how long you’ll need it. There are recurring life-long needs such as food and clothing and then there are those that only happen for a finite period such as school fees. You must assess both categories as you plan your child’s future so that you can be able to provide for all their needs. Here are a few tips you can consider:

a)Talk to your kids about money

Financial literacy is key in ensuring your kids have a secure financial future. Knowledge is the best you can give your children in as far as money management is entailed.

As a parent, you can start encouraging your children to get jobs and save for the things they ant rather than handing giving them money every time they ask for it.

You can also consider talking to your children about the basics including how to manage credit cards, bank accounts and how to budget.

b)Get life insurance

To help you safeguard the financial future of your children, you need a life insurance. Most households, especially those with minor children, struggle to pay bills when the primary wage earner in the family passes on.

While most parents might be feeling discouraged, a life insurance policy is worth much more than what it takes from your monthly budget. You need to inquire about life insurance and get one to protect your family; they may be cheaper than you are thinking.

They start draining your account even before you can hold them in your arms (Shutterstock)

c)Draft a will and designate a guardian

Most parents are guilty of not having a will. Having a will is imperative when it comes to protecting your children’s financial futures. You need to ensure that everything is clear and that every child is capable of taking care of themselves even after you are gone.

While at it, you also need to designate a guardian who will look after your children as well as a property guardian who will manage your estate until your children are old enough to take charge.

d)Consider investing in a child Insurance policy

You need to consider a policy that accords you adequate flexibility in that it does not lock way your money for a majority of your life. An ideal policy would be one that allows you to access your money in a timely fashion including withdrawing some when you need to attend to emergencies and unfortunate events. Also, a good policy should still protect your children even after you are gone.

e)Save for retirement

Saving for your retirement can help your children’s future as you will not need them to provide for you financially in old age. You can start saving for your own retirement by having a set amount deposited directly to your account. Remember, the earlier your start saving the more time your money will have to grow.