Financial planning for children is essential to make their future secure and help them achieve more in life. Therefore, it is necessary for parents to be aware of the different phases where financial planning for children is required.
Bringing-up child as a successful and responsible individual is a dream of every parent. However, planning the future of children is incomplete without financial planning for them during each and every stage of their development. Have a quick look at different phases where financial planning is needed for growth, development, better career and better future of children.
Once the parents have a handle on their spending, you can put the numbers into a long-range financial plan that will either calm their nerves over the impending birth (and life change) or scare them into a healthy state of hyper-frugality. As part of the planning process, you can help them weigh out some important issues, such as how to prioritize saving money versus paying off debt and balancing saving for college and retirement.
Take a year-to-year approach. When it comes to long-term goals such as higher education, invest in equity-related products. This is because equity delivers the best results over a long period. But do remember to gradually move your equity investments to debt as you near the goal, say, a year or two before. Always have some products in your kitty that you can liquidate easily.
Always remember that planning for your child’s future is only one of the goals of your overall financial plan.
While you take care of your child’s needs, don’t neglect your own goals such as retirement. You don’t want to be unprepared for it.