When your children are young, safeguarding their financial future seems like a job you don’t have to do for another decade. However, the earlier you start establishing their future finances, the easier it will be for them to achieve financial security when they grow up.
If you want to safeguard your kids’ future and whether you are still alive to see it or not, here are the essential steps you must take:
1. Write your will
With the help of your trusted lawyer in Townsville or any other place, you can start drafting your will as soon as your first child is born. By creating a will, you can ensure that your child’s future will be protected if you suddenly pass away. If you fail to draft a will before you die, there may be complications about who is entitled to your estate, and it can cause unnecessary stress for your family.
2. Name a guardian
In conjunction with the first tip, naming a legal and financial guardian in your will is necessary to ensure that they will be taken care of in case both you and your spouse pass away (or become incapacitated) while your child is still a minor. The guardian may also be the one to handle your finances, but you can choose a different person for this role. But for both types of guardians, you need to name someone you trust wholeheartedly, preferably a family member or a close friend.
3. Start a college fund
With the price of higher education continuously rising, it can be difficult for your child to get into college if they don’t have enough money. They may resort to taking out a loan which can put them in debt for years, or take up a part-time job to support their needs while studying.
Set up a college fund as early as you can to prepare your child for their college years. If you open up an account in their first year of life, you will have 18 years to save up for their education, which is more than enough time to accrue a sizeable amount.
4. Teach your child how to save
Educate your child about financial responsibility in their early years, starting by giving them a piggy bank. Teach them the value of saving money and why it matters for their future. If your child grows up with this value, it will be easier for them to save money, and they will better understand its value.
5. Train them how to handle finances
When your child gets a little older, teach them how to handle finances so they can be at least a bit prepared when they become an adult. Have them sit by you the next time you create your monthly budget. Tell them how much money you make and how much you need to spend on certain things, like mortgage, food, gas, and other obligations. In this way, they can see how money works and why budgeting is important.
With these tips, you can safeguard your children’s financial future and gain peace of mind knowing that they will do fine even if you’re gone. If you have children and haven’t thought about their finances yet, these tips should help you start preparing.