With an uncertain economic future ahead, it is smart to budget and save for your children. The cost of their living expenses and education will continue to rise, so make sure you plan ahead by following a few tips.
Start Saving Early
You can start saving even when your child is a newborn. Set up a savings account in his or her name, and start contributing what you are able to. Even if it’s just a few dollars per month, over the years of your child’s life, this money will accrue interest. Some online savings accounts offer higher interest rates than traditional banks. When your child is young, put any monetary gifts that he or she receives into the savings account.
College Savings Plans
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Many parents hope to pay for college expenses for their children, so you may want to look into a 529 savings plan. Many investors encourage parents to utilize this type of plan, since it accrues interest without taxes, and you won’t have to pay taxes on it as long as your child does use it to pay for tuition. There are a lot of options for flexibility, so this is a great option for those who plan to help with education.
Reduce Interest Rates
If you have a high interest rate on your mortgage, you can also save money by refinancing for a lower rate. Currently, rates are at all-time lows, so check out the different options available through AmeriSave on SlideShare and talk to an expert who will help you decide what is best. They pride themselves on high levels of customer service and ease of use.
Spend Less on the Next Child
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As your family continues to grow, save gently used items from the previous children. On average, a family might spend about $12,370 on a second child, but you can drastically reduce that amount by reusing clothing, bottles, high chairs, and other expensive essentials. You can also try to find and buy used items instead of buying brand new.
DIY and Cheaper Options
When your children are young, look at ways you can save money on the basics for them. Baby food costs around $1 per jar, but you can make your own with fresh foods and a food processor. You can store baby food in the freezer, which can save you hundreds of dollars over the first year. You might be tempted to spend less at a time on diapers by buying smaller packages, but do your research and determine a price per diaper. Then you can stock up when you find them on sale and save a lot of money.
Watch Your Family Budget
The last way to save for your children is to set up a reasonable budget and stick to it. Make sure all family members are on board, and utilize online tools to track spending and cut costs. If you find one area of spending that is difficult to cut back on, try to cut back in another area.
These tools will help you and your family prepare for the future, and rest easy knowing that you are doing the best you can to provide for your children.
(Guest post by Amanda.)