Being a parent is one of life's most rewarding experiences. However, children grow up fast, and so do their needs. Begin saving as soon as you can and as much as you can afford for your child's future to make your child's life easier. Here are some money-saving tips that'll help you give your child the educational opportunities they deserve.
1. Start Now
You may have considered saving for your child's future but are holding off waiting for the perfect time. Well, there's no better time than now. About 87% of private schools have less than 300 enrolled students, allowing for a more individualized approach to education. With that said, though, private schools can be costly. However, according to The Genius of Play, children as young as three years learn to interact with the real world when they frequently engage in realistic pretend play. Private school settings truly provide the best settings for children to explore their interests, such as performance arts. When your child is given the opportunity to plan and learn, they'll become a well-rounded student!
To get your child the best education, start saving as soon as possible, as much as you can. Saving for your child's future isn't just about how much money you can set aside; it's also about how long you can save. Even if it's a tiny sum, a steady contribution will see your savings grow over time.
2. Open a Savings Account for Your Children
Opening separate accounts for children you'll continue to manage until they reach age 18 is wise for various reasons. First, you can gradually accumulate a sizable sum over months and years by setting up regular and automated payments from your account. Having separate accounts also makes you think twice about spending your child's savings for other purposes. Even if you want to withdraw the money, most banks apply withdrawal limits, so you'll be limited to what's necessary.
Children's memory recall on a digit span test improved after six weeks of music intervention. However, music intervention isn't cheap. With a savings account for your child, the funds can cushion you from the cost if the need arises.
3. Consider Investing
A well-thought-out investment in financial instruments such as shares can have great chances of success. It puts you in a position where you can benefit from potential company returns and market growth, which can add to your savings. So, if you have time and don't need the funds in less than three years, investing may be a better option.
4. Consider a 529 College Savings Plan
Contributing to a 529 College Savings Plan offers several benefits. One, you get to enjoy tax-free policies. When you take the money out to pay for your child's college education, you won't be taxed a dime.
Second, you benefit from the high contribution limits, which maximize your tax benefits in the 529 savings plan. Unlike typical savings accounts that give control to the beneficiary once they reach legal age, a 529 savings plan allows you to maintain control, so the money isn't used for any other purpose.
5. Open a Roth IRA Account
Opening a Roth IRA account in your child's name is a popular way for parents to save for their children's future. While you'll pay taxes for the money you put into the Roth individual retirement account, no tax will be imposed on the earnings from the account.
If your child is already a teenager and wondering how they can save money, a Roth IRA account offers a solution. When your child eventually withdraws the money from the account, they won't be required to pay income tax on it. A Roth IRA account is ideal for those who anticipate reaching a higher tax bracket when they finally decide to withdraw the money.
With the costs of high-quality education reaching an all-time high, saving money for your child's future is one of the most significant investments you can make. Use these tips to help you!