When they are born, it is hard to imagine that these tiny little beings are one day going to grow up and leave home. But that is, in most cases, the plan for them. Make sure your kids are ready for their financial futures with these five simple tools.
- A College Fund
Unless you really need to use them for daily care expenses, consider putting any monetary gifts your young children receive into a college savings plan. There are many that have tax advantages, and grown kids may be able to use the funds for other expenses in certain situations.
- Bank Accounts
Let your kids get used to managing their own money. Open savings accounts for them when they are young, and add checking accounts once they are old enough. Many banks offer special checking options for teens to help teach them healthy spending and savings habits.
- Health Coverage
No or insufficient health care can lead to a whole host of chronic conditions. Make sure your kids get basic preventative care and are covered in the event of an emergency illness or injury. Most children can now stay on a parent’s insurance until they are 26, so you may be able to keep them covered by your policy even as they are getting started on their own.
- Life Insurance Policy
Make sure both you and your children are covered by a life insurance policy. A child policy can be an affordable way to get lifetime coverage for your kids as long as they continue paying premiums. You should also have enough coverage to ensure your family’s comfort and security if you were to die suddenly. A guaranteed acceptance term life insurance policy could help cover final expenses if you haven’t made other arrangements.
- Financial Education
These tools are helpful, but nothing can replace having open and honest conversations with your kids about money, investing, spending and saving habits. Set a good example with your own money habits and let them take on gradually increasing responsibility as they seme ready and willing.