The Most Important F-Words: Finances & Family

As a parent, there is no end to the list of what you worry about. Finances play a vital role in taking care of your family…from being financially stable, handling unforeseen circumstances, moving into a bigger home for your growing family, saving for your children’s college education, planning for retirement, and more. It’s important to prioritize your financial foundation as your family grows, and essentially have all of your ducks in a row. Whether you are securing your legacy or your child’s future, you’ve come to the right place so let’s get into it:

While changing diapers, you probably aren’t thinking about your children’s financial future, but you should. Okay, maybe not while changing diapers, but definitely while they’re young, because the earlier, the better! Here are some ways that you can start building your child’s financial foundation:

Savings Accounts

Of course, it's much easier said than done, but starting a savings account specifically for your kids is a great place to start. You can choose a certain amount to deposit on a set schedule, then sit back and watch your money grow. I recommend using a reputable high yield savings account such as Marcus by Goldman Sachs, to earn more interest on your savings compared to traditional banks. The earlier you start saving, the better because not only will you give your money more time to accumulate and grow, but the compound interest will really start to add up! As your child becomes more mature, you can later use this account to teach them financial principles such as budgeting and savings habits with funds from allowance or gifts.

College Savings Accounts

Education is a valued asset that has risen exponentially in expenses throughout the last decade. Consider using a college savings plan as an additional savings account, such as the 529 College Savings Plan, which is a tax-advantaged savings plan. Less taxes are always a win! But, on a serious note, the 529 College Savings Plan can put your family in an awesome position when saving for college, because the money grows tax-free and when it’s used on an eligible education expense, it is also withdrawn tax free.

Financial Literacy

Be sure to emphasize the importance of financial literacy to your children, but in a much more childlike manner. As soon as they begin to learn about money, whether that’s from school or from you, talk to them about saving and budgeting, and as they get older you can introduce more complex topics such as investing. When your child is young, make it fun and engaging when teaching about money, get your child a piggy bank so they can physically see their money grow, or play money focused games such as Monopoly.

Estate Planning

Estate planning is a critical aspect of financial stability such as creating a will or setting up a trust fund. Creating a will ensures that your child receives your assets just as you intended, in the event of your death. Additionally, to further help provide a solid financial foundation for your child, consider setting up a trust fund. Both of these options are terrific when ensuring that the financial legacy you’ve built is well protected.

As you experience all that life has to offer, including marriages, having children, attending graduations, it can be reassuring to be able to focus on enjoying those precious moments, without worrying about financial stability. By implementing these strategies, you are establishing a solid financial foundation for your children. You are passing down a legacy and ensuring that your children have the resources they need to succeed and further that legacy.