Kids are expensive. Every parent knows this. We aren’t just talking about the day to day expensiveness of kids—toys, clothing, etc. You want to make sure that when your baby birds leave the nest they aren’t shrouded in debt for their entire second decade (or longer).
via Tax Credits on Flickr Creative Commons
- Set up a really good savings account. You want to find an account that offers a high interest rate. This way your money can earn money. The best savings accounts will offer you compound interest. This is where the interest earned on the account is added to the general balance of the account so that even more interest can be earned over time.
- Put the account in a trust that can only be accessed according to certain terms that you can set up with your lawyer and the bank (you can set up an account for yourself, too). You can decide that the only person to have access to the account is your son or daughter, but only once a certain age is reached or even if certain criteria are met. This makes it impossible for you to use the account for other things and prevents your kids from potentially taking the money you’ve worked so hard to save and blowing it on something frivolous as soon as they come of age.
If you really want the money you save up for your kids’ futures to do the most good, you have to add to the fund regularly over time. Don’t just deposit a lump sum now and hope for the best ten years down the line. Add money to the fund every week or month of your child’s life so that there is as much as possible available when the time comes to use it for its intended purpose (like funding a college education).
You make some really good points. My husband got a large inheritance a few years after we got married and we put a large amount away as a college fund, and we weren’t even trying for kids yet! My family helped me through school and I want to do the same for our kid(s).
I had no money saved for college and it was definitely rough to take that burden on myself–it’s so important to save for your kids’ education!
I have to agree. Start saving and put what you can in. I had no savings as a child and found it difficult as I didn’t want to take loan after loan, so I lived broke for a long time. We have started to save for both of our kids. Every little bit helps with their future!
Boy, kids ARE expensive. I do have savings accounts for both of my boys. It mostly has the money from their Christenings, birthdays and Christmas. We also have college savings plans for each of them through Fidelity. I figure that by the time they make it to college, the price will have at least doubled.
It’s so important to start young. It does add up and it can make a hefty difference for college!