Children are expensive, and that’s an understatement. The Brookings Institution estimates that raising a child to 17 years might now cost $26,011 more than eight years ago. And that doesn’t even include the cost of attending college. That’s a lot of money, but saving regularly, especially when your kids are little, could pay off in the long run.
Saving involves more than putting money into a piggy bank. It entails budgeting carefully and setting goals for the future. This article will examine a few simple budgeting techniques you can’t afford to overlook when saving money for kids. Read on to learn more!
Plan Regularly-Needed Services in Advance
Planning for regularly-needed services in advance can significantly benefit your kids’ savings. Take the example of a residential pest exterminator or dry cleaning service. These are services you can’t do without. However, you may get reduced prices if you plan and schedule services in advance. Proper preparation helps avoid overspending on last-minute or urgent needs and saves money. This means you can set aside more money for your children’s needs in the future.
Additionally, find a reputable dry cleaning company that provides discounted rates for bulk orders. The idea is to cut costs on laundry and dry cleaning services. Similarly, consider registering for a monthly pest treatment service that discounts packages. In addition to saving money, this strategy will ensure your house is free of pests and safeguard your family and property from potential harm caused by bugs.
If you plan for regularly-needed services ahead of time and take advantage of discounted rates, you can save money for your children’s education. These savings can build up over time to give them a solid financial foundation for education, extracurricular activities, or perhaps their first car. Therefore, when it comes to routinely required services, never underestimate the value of preparing ahead and taking advantage of cost-saving opportunities. Your kids’ savings will thank you!
Don’t Be One of the Many People Who Skip Their Will
The idea of making a will doesn’t sound pleasant to many people. However, drafting a will is a necessary preparation for the future. Regardless of age or financial status, estate planning is essential for everyone. When you make a will, you specify how your assets should be distributed after death, ensuring your children are cared for.
A recent AARP survey found that about 60% of Americans do not have a will. Don’t be one of them. Consult a lawyer focusing on estate planning to assist you with the procedure, and consider getting a probate bond for additional protection.
You can prevent the need for probate or significantly speed up the asset distribution process by having a properly written will in place. As a result, your children will receive a larger portion of your assets without costly expenses like legal fees. While a probate bond provides a level of security for your possessions and children against misappropriation by executors or administrators, your estate control will still be in the hands of outsiders.
Creating a will ensures that your assets are transferred to heirs according to your preferences, hassle-free. The last thing you want is financial burden or disagreements when your loved ones are grieving. Taking the appropriate action gives your children peace of mind and financial security.
Don’t Leave the Funeral Planning to Your Kids Down the Road
While preparing for your funeral in advance may seem morbid, it can significantly lessen the strain on your children in the future. Make bold decisions about burial or cremation, caskets, and even the event venue as part of funeral planning. Reliable family lawyers can guide and help you make informed decisions, as it’s the case with preparing a will.
Planning for your funeral can save your children the stress and financial burden of arranging it and enable them to fulfill your final wishes. Funeral fees can add up rapidly, burdening bereaved family members with unanticipated bills at a trying time. Planning allows you to explore options, evaluate costs and settle for affordable products or services.
Some insurance companies and financial institutions have affordable solutions that allow you to contribute a small amount of money periodically toward your funeral. With these plans, you won’t feel the financial pinch. So don’t shield your loved ones from the burden of arranging for your funeral. It might end up consuming substantial amounts of your lifetime savings. Make it easy for them to mourn you peacefully when you are gone. By making financial arrangements in advance, you can reduce their anxiety and allow them to cherish your memory.
Clear Out Unnecessary Items With Junk Removal Services
Our homes can accumulate unwanted items over time that take up valuable space. Disposing of junk while adhering to set regulations isn’t a cakewalk. For this reason, consider using a junk removal company. These companies quickly and efficiently eliminate undesirable items, which can help you save money on moving costs and make your home more orderly.
Decluttering can result in big savings for your children. For instance, old appliances such as AC consume a lot of energy. Chances are you already have a new energy-saving machine. You’ll be tempted to use your old unit instead of leaving it lying down, increasing energy costs.
Also, the clutter increases the overall cost whenever you need to move. You can cut down on the number of belongings that you need to transport by getting rid of unnecessary items. You’ll end up paying less to the moving companies.
Decluttering also helps you avoid making future impulse purchases. It’s easy to lose track of our belongings when our homes are cluttered, which might result in unnecessary purchases. Organizing what you have and getting rid of things you no longer need or want will help you save. You’ll no longer spend money on things you already own but can’t find because of the clutter. So declutter and reap the financial rewards for your children’s future.
Keep Up With All of Your Property’s Needed Inspections
How do on-time inspections save money for your kids, you ask? Regular inspections and maintenance help find faults and fix them before they become costly problems. For instance, routine checks by AC repair companies can prevent minor AC problems from ballooning to costly repairs during peak usage times.
Here’s a startling statistic: between 2015 and 2019, water damage claims accounted for around 24% of all losses from homeowners insurance, according to a survey by the Insurance Information Institute. A faulty roof is one frequent reason for water damage. However, a leaky roof repair can help you avoid costly repairs when detected early enough.
Regular inspections detect roof issues early, allowing you to take the required precautions to prevent costly damage. This translates into extra money in your pocket that you can use to fund your children’s needs in the future, such as their schooling or the down payment for a new home. So don’t undervalue the importance of routine maintenance and inspections. They are essential to ensuring a better future for your children.
Do Your Part to Avoid Future Accidents
It’s said accidents are unforeseen. However, you can prevent accidents by taking precautions. Remember, accidents might leave you with high medical bills and other expenses. You can safeguard your kids and their financial security by taking proactive action.
Proactive steps should extend to your kids and pets. For instance, you can spend massive amounts when your pet is injured in an accident. Luckily, these incidents are preventable. For instance, pet neutering services reduce your pet’s urge to roam, reducing the likelihood of getting hurt. The expense of caring for a pet can run from hundreds to thousands of dollars per year, according to the American Society for the Prevention of Cruelty to Animals (ASPCA). Additionally, neutering your pet can prevent future costs related to unintentional litter and health risks.
Childproofing your home is another essential step in preventing future accidents. You can make your home a secure place for your children by installing safety gates, fastening heavy furniture to prevent it from toppling, plugging outlets with covers, and keeping dangerous items out of reach.
Installing functional smoke detectors is another cheap yet effective strategy to prevent accidents. Your home may sustain significant damage from fires, necessitating pricey replacements and repairs. Additionally, install fire extinguishers and ensure every family member knows how to use them. The goal is to ensure quick response during a fire incident, reducing potential losses.
Embrace the Power of Compound Interest
It’s said compound interest is the world’s eighth wonder. Compound interest can help you boost your savings over time. Your money increases based on the initial investment and the accrued interest.
Let’s look at an example to see the impact of compound interest. Suppose you start setting aside $100 per month from when your child is born until they turn 18 for their schooling. Your contributions alone would total $21,600 for 18 years, assuming an average annual return of 8%.
However, compound interest can potentially increase that sum to over $44,000, doubling your initial investment. This shows the exponential growth that may be attained by starting early and harnessing the power of compound interest. Don’t underestimate the importance of saving early for your children’s future because it will significantly impact their financial stability.
Automate Your Savings
The single biggest threat to saving is discipline. Automating saving makes the process simpler and more efficient. Set up automatic transfers from your checking account to a children-specific savings account. Automating your savings helps avoid the temptation to misuse the money and ensures that you make regular contributions toward your long-term financial objectives.
A Bankrate survey shows that people who automate their savings are likelier to reach their financial objectives. According to the study, only 23% of respondents who didn’t automate their savings had the same success saving for emergencies, retirement, or other financial goals as the 55% of respondents who did. By automating your savings, you boost your chances of achieving your objectives and giving your children a strong financial foundation for their future pursuits.
Involve Your Children in Setting Financial Goals
Setting financial goals with your children will help them develop a sense of ownership and accountability for their future savings. Sit down with them to discuss their goals and establish concrete ones. Involving kids in goal-setting encourages them to actively contribute to their financial future, whether saving for a specific item, a college fund, or a long-term investment.
A US Department of Education study infers that individuals who practice responsible financial behavior tend to use money wisely by creating budgets, saving money, and exercising control. Including your children in the goal-setting process gives them the power to take charge of their financial future and helps them develop essential skills like prioritizing, budgeting, and decision-making. Through their active participation, they lay the groundwork for a sound financial mindset and get started down the road to long-term financial success.
Utilize Tax-Advantaged Accounts
Did you know you could benefit from tax exemptions? Using tax-advantaged accounts is prudent when setting money aside for your children’s future. These specialized accounts help you save money and lay the groundwork for a financially secure future for your kids.
One of the tax-advantaged accounts is the 529 college savings plan. You can use this account to save money, particularly for your child’s college costs. When you contribute to a 529 plan, the money grows tax-free – you won’t have to pay taxes on the investment gains. The only catch is that you must use the money for qualified school expenses. Additionally, many states provide tax deductions or credits for contributions to a 529 plan, increasing the potential for savings.
It’s important to remember that tax regulations can change, and your location and unique circumstances may affect the specific requirements and advantages of tax-advantaged accounts. Evaluate the alternatives available and choose the best strategy for maximizing tax benefits while investing in your children’s future by speaking with a financial counselor or tax expert.
The importance of saving can’t be overemphasized. You can hit your saving target by implementing the strategies outlined in this article, such as employing tax-advantaged accounts, automating your savings, and embracing the power of compound interest. To maximize savings potential and guarantee a better financial future for your kids, consider starting early and automating savings. Start implementing these strategies immediately to set your kids on a path toward financial stability and success.