Teaching your children how to develop their own savings strategies is important, but it's also essential that you consider how you manage your own finances so you can support your children's future needs - whether you're planning to help with college, a car, a wedding, or even something in between, such as a reliable computer, a phone, or their first professional wardrobe. There's a lot to consider, so we hope the following tips help start you on your way.
Understanding that none of us are promised a tomorrow, when it comes to your child's future, making sure you have a contingency plan to support them no matter what happens is a sound decision. And although it may seem like a gloomy topic (the rest of the tips will be more lighthearted, I promise), life insurance is an important safeguard that can ultimately provide a great deal of peace of mind for you and your loved ones. With life insurance, there are bonuses for starting earlier because typically the younger and healthier you are, the lower the rate you can lock with your plan. So, whether you're well into parenthood or you're just now choosing the colors for the nursery, take a moment to research and consider the rates and terms of you may get today versus waiting. Additionally, consider a plan that will help cover any financial obligations you may leave behind (like a mortgage). With big decisions, it is always a benefit to shop around and seek expert advice. In the end, providing for your family in good times and through the unexpected is an investment well made.
Pay down debts, then save, save, save
Consider your plan of attack when dealing with accumulated debt. With the exception of a mortgage, focusing on systematically paying down debt so you can start building saving opportunities full-time. Whether it's credit card, student, or medical debt - paying it off sooner may seem like a pain point at first, but staycations and dining at "Casa You" will pay off in the long run - allowing you to enjoy and employ more of what you earn later on in life. Once you're on a saving track, work toward accumulating liquid funds to cover at least three to six months' worth of expenses. Finally, save like you've never saved before - and don't be afraid to lock a portion of your funds into something less accessible that may earn higher returns, like a CD. Nothing brings greater peace of mind than a debt-free existence with a comfortable safety net. So, rid yourself of those worries by creating a plan that's right for you and your family.
Know why you're saving
It may seem like a basic thought, but have you asked yourself what in particular you're saving for? Clearly, mindlessly saving is better than not saving at all, but saving with a plan can be more effective and allow you to apply the best tactics to reach the goal. When it comes to saving and kids, it can be a bit of a balancing act to know exactly what you're saving for. There are long- and short-term goals to consider. Are you saving for college, a car, family vacations, a wedding, or a combination of them all? No matter what, it's always a good idea to start planning and saving for the must-haves - even when they seem further down life's road. It's never too early to ask pertinent questions to help narrow your goals. Do you want to pay for 100 percent of their future college tuition, or just subsidize their education with a fixed-figure contribution? Do you want to buy their first car, contribute to a portion of it, or is that something you believe they should be saving for with their first job? How important are family vacations and experiences you share together, and how often do you want to take them? There are no right or wrong answers to these types of questions, but the chances are greatly increased that you'll be on the right path financially to tackle all of your big (and small) plans for you and your child when you do. So, take a moment to decide your financial goals and then build a budget and saving plan to get the results you truly want.
Strategize your accounts and where you allocate your funds
When you consider the options available 20 years ago, today there are a mindboggling number of different kinds of saving strategies and accounts - which makes it ever more important today to be sure you're aligning your saving goal with the right saving account. For example, if you're saving for a computer, the basic family savings account will most likely work just fine. But if you're allocating money for your child's college, you'll want something that more aggressively grows your hard-earned (and saved) money - something a simple savings account won't do. After you develop your savings priorities, you can begin researching which type of account(s) supports your goals and enables your money to work harder for you. Caution - although this step can quickly seem overwhelming by the sheer number of options available out there, don't let that stop you from taking the next step. Consult with a financial planning expert, like the professionals you have access to through your membership with SAFE. With your preplanning in hand and their expertise at helping members improve their financial well-being, you'll have everything you need to make the best decisions possible - every step of the way.
Save for yourself
One of the most common answers to the question; "What do you want for your child's future?" is; "To be happy and financially secure." It's very important to remember that when you're considering long-term saving strategies for yourself, you're also saving for your child's future. For example, if you don't have a well thought out retirement plan in place, your financial burdens will most likely fall to them when that time comes. As much as every kid wants to believe their parents will be there forever, the next best thing is to fully enjoy all the years you are together - free from financial worries. Plus, with a little bit of effort, some smart planning, and thoughtful decisions, you'll be able to gift yourself a comfortable retirement with your kids and future grandkids (who you'll most certainly want to spoil rotten).
Considering saving strategies for you and your family may often take the back seat to the many every-day activities and obligations that can take precedence over your long-term planning. But, with the right support and a more focused approach to saving, you're sure to spend less time worrying about your financial well-being, and more time enjoying your family, your life, and your legacy.