Financial Planning For Babies & Young Children
Whether you're a new parent or about to become one, it’s time to address the bigger questions about your child’s future.
Bringing home your new bouncing baby should be an exciting time of celebration,not cause for worry about how you're going to pay for feeding, clothing, and caring for your new bundle of expenses.
The average family will spend between $10,000 and $18,000 during a new baby's first year and more than $200,000 or more before the kid's 18th birthday, a second child only doubles your costs.
Our goal is to provide tips for new parents with financial security from the start, so that they can pursue work and activities that they find fulfilling, and not have to abandon their dreams just to keep a roof over their heads. Most of us don't realize until we're 50 and have a cholesterol level of above 192 what we should have done when we were young.
It would be a great world if every single parent and grandparent were exposed to the opportunities to help their kids. If we make a million people millionaires, my daughter will be the most popular woman in the nursing home.
Parenting / Grandparenting 2.0
Life is a series of stages.
Exciting changes come with each stage of life. Remember the children's chant, "First comes love, then comes marriage, then comes Jane pushing the baby carriage."
From planning for a new baby to planning to retire, each stage has financial needs. As you begin your new life together, you may plan to travel, have children, set other goals, and seek to fulfill your dreams. All will require some finance planning.
Retirement planning for you or your child will likely be furthest from your thoughts at these early stages of your life. At a time when you're having children and thinking of new life, it's important to also think about retirement. That may be hard. But, think about your children and their future.
Parenting is the most important job that we will ever have and yet one that doesn't come with any training. Most importantly, it takes time and attention. One thing most parents want to do is save and invest for their child's future and as parents of new babies have discovered in recent months.
We need to teach our children more about the value of money and basic budgeting skills - especially the concept of living within one's means. In conjunction with teaching about investments and savings, we also need to teach about debt and the effect of carrying revolving credit card balances for discretionary purchases and of the usurious rates the check cashing/payroll advance businesses charge.
Seems like the people that can least afford it are the ones that get hit the hardest. And once caught in that cycle, it's twice as hard to climb out.
As Benjamin Franklin once said.
"An investment in knowledge always pays the best interest."
You can have a family and make a comfortable future for your children while saving for your own important goals.
Some comments from Paul I had a 3.94 GPA in high school and a 3.72 in college, but it wasn't until after I graduated from college that I realized I didn't know anything about money.
Our standardized education does nothing for the financial literacy of the upcoming generation. Parents must take an active role in this, but unfortunatly many adults suffer from financial illiteracy as well.
It is incredibly shameful our schools have zip on personal finance. Books for new parents on financial help are non existant.
HOW TO TURN YOUR BABY INTO A MILLIONAIRE
Newborns whose parents put aside 41 cents a day will be millionaires by the time they're 65, assuming a 10 percent annual return. Your baby has a lot of time to grow - and that's something this strategy exploits to the fullest. As a parent, you are in the lucky position of being able to give your children a boost towards that millionaire status by starting a I R A, pension or savings plan, and taking advantage of the miracle of compound interest. Of course, your little ones are unlikely to care for a good few years yet but when you introduce the notion of saving this should give them something to think about, when the time comes! A social scientist says we'll have a stronger middle class when we give savings accounts to babies. I would also add that it is very easy now to set up on-line custodial accounts, so start the compounding with stocks, bonds, ETF's, and mutual funds as soon as you can after starting the local bank account.
Will the recent market downturn diminish the accounts' appeal? If I paid attention to bear markets, I'd be distracted. Start saving now. Time is your most powerful ally. Even if you can't spare much, compounding will let you make the most of it over the long term. Normally, you start an IRA in the babys name and use your earnings and / or the money the baby receives from family members to pay into it initially, but the child can choose to continue it later on or join an employers pension, or start their own scheme later in life.
New baby checklist
Little things make a big difference.
Compounding:Your babys money multiplies like bacteria.
