The old saying “live for today, plan for tomorrow” is a phrase many people follow, but it’s especially important for parents with children. The last thing parents want to happen is for their child to experience stress or heartache in the future. Creating a plan of action today, however, is a step in the right direction to ensure that your children won’t have to worry about some of life’s most common problems.
Here is some useful advice that every parent can follow as soon as possible.
Save money for large expenses:
During their youth, your child will reach many different milestones. Case in point, most teenagers want to get their driver’s license and on the road as soon as possible. Cost associated with driving; for example, driving lessons, car insurance or even a new car means you might have to assist them with the expenses. That’s why it may be in your best interest to open a savings account to help offset those big purchases.
Create a living will:
It’s important that all parents with children prepare their last will and testament, or the document that determines what happens to your estate after you’re gone. The creation of an estate plan does not have to be difficult. For example, making a valid will can be as simple as handwriting a document or purchasing a will kit. Another step to protect your child in the case of your death is naming a guardian. It is best to contact an attorney to create a personalized plan that meets your family’s needs.
Open a Registered Education Savings Plan:
If you’re a parent, you have probably envisioned every major milestone that your child will have – from their first steps, to the first time you send them off to school, all the way to graduation day.
If you child plans on pursuing a degree at a post-secondary university, the question becomes- how will you pay for it?
That’s why it’s best to start saving for your child’s education right away. In Canada, opening a Registered Education Savings Plan or RESP through providers like Children’s Education Funds, Inc. (CEFI) is one of the smartest routes to go in order to maximize your savings. Even if you can only save a small amount, it can add up over time.
Get life insurance:
It may feel morbid to think about death, but one of the best ways to protect your child financially is by taking out a life insurance policy. In the event of a tragedy, a life insurance policy is a worthwhile investment to give your child the financial means to help cover immediate and long-term expenses.
Teach your child about finances:
Nothing will prepare your child for the realities of handling finances as an adult if you shield them from financial matters. Talk to them about things like paying bills, budgeting and how much money moves through your household to help your child fully understand the importance of spending wisely and earning a living.
By taking steps early to set your child up for a sound financial future, you can reduce the burden that could arise in the event of an unforeseen circumstance. Take care of it now and your child will have the best chance at a stable future.