Saving early is the key to financial success. Therefor, when you save for your children’s future, you are setting them up for financial success. If you are planning on helping your children with college, trade school, a new house, you should start saving as early as possible.
Did you know? College-bound children’s parents can expect to pay at least half to a third of the cost of their children’s education. That means your current income, savings and loans.
Government aid and scholarships generally only pay for one-third of all college expenses. That leaves many students with large loans after graduation.
So how can you help out and save for your children’s future?
- Start saving the day your baby is born and save as much as you can. Compounding interest will also make your savings grow.
- Save money on a consistent basis rather than on a random schedule.
- Consider setting up an automatic payroll deduction or have your bank automatically move money from your checking account to a college savings account.
- Establish a savings goal to measure how well you are saving and modify that goal as your salary increases.
- Ask other relatives to contribute to the savings account in lieu of gifts.
- Save windfalls such as inheritances, income tax refunds or bonuses. Don’t rush out to spend this fast cash.
- Increase the amount you save by five percent each year to keep up with the college tuition inflation rate.
- Place the money you once used for expenses that are no longer here into the savings account.
- Cut down on normal living expenses and redirect that money to your savings account.
- Teach your children about saving by getting them involved in the financial preparation for their education.
Saving early is the key to financial success in the future.
Even modest savings can grow into significant investments by the time your child is ready to head off to school. For instance, putting away $50 a month beginning at your child’s birth would yield $20,000 by age 17, with a 7% return on your money. Bump that up to $200 a month, and you would yield almost $80,000 by age 17.
Get your own finances in order while you save for your children’s future. Make sure to pay off your credit cards, maintain a savings account for unexpected expenses as well as putting some thing away for retirement.
One last way to save for your children’s future is to do an insurance review with your agent. They will review your coverage to make sure you are covered correctly as well as receiving all available discounts. Something as simple as putting your homeowners insurance and auto insurance with the same company can earn you an extra discount.
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