If you’re expecting a new baby you need to do a lot of stuff to get ready before the baby arrives home. You have to buy diapers. You have to buy a stroller. You need a crib to put the baby to sleep. You need a car seat to take the baby around with you. The baby has to go everywhere with you so you need to buy everything you need to keep the baby safe.
What about the baby’s future though? Have you thought about that? What about all the money the baby will need until they’re ready to be on their own? Have you started to save for college? It’s never too soon to be thinking about all the finances associated with a new addition to the family.
Start saving now
An easy way to start stocking money away for the baby is to open up a savings account. You can get them an online savings account where your name and the baby’s name is on the account. Once they turn 18 you can give them full control of the account and take your name off the account.
Don’t worry, when the child is a minor you’ll have full control of the account. However, if you don’t like the idea of having ac account with your child you can always open a separate account for yourself where you keep everything separate. That way you can start saving for your kids future. Call it the “kids” account.
The other good things about getting an account opened in your kids name is that you can start teaching them early about saving money. If you can teach them early on they’re going to be that much better when they finally go out on their own. Start teaching them early and hopefully they’ll learn from you and follow through. It will make their lives that much easier when they finally join the “real world” and have to pay for things themselves.
Get a College savings 529 plan
These savings plans (529 plans) are state sponsored accounts where you can start saving for your child’s school tuition costs. You’ll get some tax advantages by using these savings plans, and they differ a bit from state to state. Basically it lets you save money to grow tax free. Then you’re able to use it tax free if you use it for school.
The money you saved here has to be used for tuition costs only. Don’t forget that you’ll have to pay for other things, like housing, food, and transportation. So you don’t want to put all your savings into a 529 plan. Different advisors will have different opinions about these plans, but you should definitely look into them. The key is to read the fine print for your state. If you don’t know what you’re ready then ask someone that does.
Save and save early
I’m basically mentions this again because it’s that important. You can start saving now. Even if you don’t have a baby on the way, but you are planning to have babies in the future. You can still start saving now with online savings accounts and other investment vehicles. This can encourage you to save more because you have a reason to do so.