Ways To Save For Your Children’s Future
Raising children is expensive and that expense doesn’t simply stop because your children reach a certain age and perhaps start earning their own money. In fact, as your children get older the expense is likely to increase. What is more, with the growing cost of living it will be harder than ever for children to get started in the world as they reach young adulthood. So whether you want to help them fund college, buy their first car, or help toward their downpayment on a house, saving money for their future is one of the most effective ways to do it. So, here are some helpful tips to help you boost your child’s financial future.
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If you want to accumulate a significant nest egg for your little ones then the best time to start saving is when they are born. The earlier you start the more you will save. Successfully saving is as much about longevity as it is the amount you put away. The amount you start saving with is not always the most important bit. Just start putting away whatever you can afford as soon as they are born and that pot of gold will start to build before you know it. Consider speaking to college students or watching videos about what goes on at various college campuses to get all the necessary information you may need to start saving successfully. Connecting with current or former college students can provide firsthand accounts of their experiences with scholarships and grants, giving you practical insights and tips for optimizing your own financial aid opportunities. Even though you may feel it’s too early to start with these conversations, the sooner you start researching, the better for you!
Putting money aside into an account is a great idea. It will ring-fence and protect it until it is needed. However, it is unlikely to grow all that much, other than by means of the contributions you make. Instead, you could seek to grow your child’s savings by investing them and there are lots of ways in which you can do this.
Many financial institutions will have child-specific savings accounts that offer more favorable returns than regular savings accounts. This approach can however involve tying the money up for a number of years or potentially until they are 18, so you will need to consider all of the ramifications of this.
Another viable means could be by investing their nest egg into a property. Property has long been considered a safe bet in terms of longevity and return. Bradley Ransom, CEO of Hatteras Holdings, considers property investment to be a ‘very safe bet’. A safe bet that could pay dividends for your child’s net worth. Here is a potential way in which you could invest in property on behalf of your child; buy a property with a mortgage, rent the property to tenants who then pay the mortgage, after X number of years (or when your child needs than funds) sell the property. During the time period, the property will be worth more to you as a considerable amount of the mortgage will have been paid by the tenants and the property price should have increased in value. Alternatively, if you don’t sell the property it could serve as the perfect first home for your child, saving them the time, expense, and stress of getting on the property market themselves.
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