As a parent, you want to give your kids nothing but the best – whether it be food, clothing, education, or entertainment. Sure, priorities may look different for every other set of parents but, the want of securing your child’s future and making it better remains constant.
Apart from instilling the idea of financial independence from a young age, here are a couple of finance-related tips to help grant your child a brighter future!
1. Prioritize Your Goals
The first step is to identify and differentiate between your long and short-term goals. For instance, higher education or wedding fund could be your long-term goals, while a nice vacation, a milestone party, or an expensive gadget could be a short-term goal.
You need to start practicing financial disciple for each of these goals. Long-term plans could use a Systematic Investment Plan through an investment company, and short-term plans could be fulfilled by investing in a Mutual Fund.
2. Saving In A Piggy Bank
Teaching your kid how to be money smart is your job. The idea of financial independence and a saver’s attitude, if fostered from a young age, can be extra helpful in the long run. Start by giving your child pocket money and ask to save a portion of it for the future.
At the 6 or 12-month interval, open the piggy bank together and calculate the money saved. As a reward, let your child decide what they want to do with the money. Let them know that the occasional splurge can be good, as long as it doesn’t affect any important goals.
3. Invest Today for a Better Tomorrow
You should never dismiss the fragility of human beings and the unpredictability of life. As such, there should always be arrangements in place to support your child when you’re not around.
Insurance policies are great for such instances. Consider it your last gift to your kids. Your insurance amount will depend on your income, as well as the financial requirements of your family. Also, remember to take covers for loans so that your heirs aren’t burdened after your passing.
Before signing off, here are a few more tips:
- keep your long-term and short-term savings strictly separate
- always put at least 10% (20% is more preferable) of your income into savings
- diversify your savings into different assets
- do not touch long-term funds unless for its intended purpose
- don’t let market crashes affect you as the market always recovers
As long as you’re smart with your money, there’s no reason to worry. Keep following these tried and tested tips to bless your kids with the best!