Before you have children, you might not realize just how much they cost. After all, they will be sharing your home, and they don’t eat huge amounts (at least at the start), so really, how much can they actually cost?
The truth is, the average child costs approximately $22,000 each year. That includes housing, clothing, health care, food, and transportation, as well as trips out and fun things such as toys, games, and books. What this figure does not cover is any type of savings that you might want to put aside for your children’s future. That will need to be added up on top of this sum, and it can feel as though it is impossible, even though it is also essential.
Don’t worry. There are a number of ways that you can save for your children’s future without disrupting your day to day life or having to go without. Read on to find out more.
Start Investing Early
Investments can be a great way to save long term for your children’s future. The sooner you start, the more money you will build up in your portfolio. Ideally, you should speak to a broker about where to invest your money, or at least do some in-depth research about which stocks and shares are the best places to invest in. Make sure you don’t put all of your money into one place, but diversify and spread out your investments as this will spread out and lower your risk. You could invest in CBD oil stocks, gold and silver, bitcoin, or businesses. Whatever you do, check on your investments periodically. There will be times when it will make sense to move your money from one place to another in order to get the best return.
Investments don’t just come in the form of stocks and shares; property is an investment too. If you can buy a second house or apartment and rent it out long term, you can use those funds to go towards your children’s future expenses. Alternatively, you could, when the time comes, sell that second property and, assuming you have paid off all or most of the mortgage, have a large lump sum of money to use in whichever way you see fit.
The important point is that you should start your investment – whatever kind it is you have chosen – as early as you can in order to get the most out of it, and for it to be mature enough to cover your child’s expenses at the right time.
Create A Savings Account
Having a savings account specifically for your children is another great idea. It is even better if it is one that has penalties for withdrawing the money too soon, as this will ensure that the money stays in the account building interest throughout your children’s younger years so that when they need it for college or a down payment on a house, it is there for them.
Set up automatic payments in this account or accounts each month at the start of the month and you won’t miss the money because it always goes straight out as soon as you are paid. You can build up a great savings fund in this way that will benefit your children hugely when they need the money. Over time, you can increase the payments you make into this fund and give your children an even bigger nest egg for whatever they need it for.
Search around for an account that is going to offer you the best interest rate as well – start looking as soon as you discover you are pregnant. The earlier you set this up, the easier it will be to save each month. The accounts with the highest interest tend to be the ones that make it more difficult to obtain the money before a certain date, and that is ideal for your purposes.
Sell As They Grow
In order to top up your investments, your savings, or to ensure you have spending money for a specific event, you should sell items as they grow and no longer need them. There will always be someone who is looking to buy used baby items which can be so expensive to buy brand new. You can sell:
- Baby clothing (make sure it is clean and not stained as this can be off-putting)
- Toys
- Furniture such as cribs and changing tables
- Prams and strollers
- Items such as bottle warmers and changing bags
Anything that you found useful as your child was growing someone else will also be able to make use of, so don’t take everything to the dump or give it away without thinking; sell on eBay or Craigslist, for example, and make some extra money for the child in question.
Before you sell, however, think about when to do so. There is plenty of research available on the internet that will help you. Take strollers, for example. More babies are traditionally born during the summer months, which means items such as strollers are going to be needed in June and July, so you can sell more quickly as there will be higher demand. You could also sell for more money.
Get Life Insurance
Although it’s not a fun thing to think about, we are all going to pass away at some point, and if that happened while your child was under the age of 18, what would happen to them? By setting up a good level of life insurance, you can at least rest assured that they would receive a payout to enable them to have something to get by on if you were no longer around. You can request for this money to be put into a trust until they are old enough to use it, for example. There are many different options, and speaking to an expert who can guide you in the right direction will help hugely.
Teach Good Financial Sense
Finally, teaching your children how to handle money is all important. This will ensure that they are able to use their money wisely, and that they will save when they start earning too. This is one of the most important things you can do for your children, as it gives them a great head start in life, and is a massively important life skill for them – and anyone – to have.
