A SMALL INVESTMENT CAN TURN OUT TO BE A HUGE HEAD START FOR YOUR KIDS...
We all want our kids to get a good start in life but how are you supposed to do that when the budget is already tight? ...It just takes a little bit of pre planning when your kids are born, for an easier transition into adulthood and their future.
If you’re a new parent, it's never too early to plan for the time they'll turn 18. You can get started straight away and give them a head start in life for as little as $5 a week. It's easy to sacrifice one coffee or alcoholic drink a week to reap big benefits from the very small investment. I know you can all find $5 a week for this :)
It’s never too late to start if your kids aren’t newborns too. Double it to play ‘catch up’ if you’d like to do this for them.
We waste small amounts all of the time. Whether it is $5 once a week for a cup of coffee or that alcoholic drink. Spending too much on living expenses and eating out, we can all save $5 somewhere to stretch our income a little further to do this for our kids.
By saving $5 into a separate savings account each week until your child turns 18, you can gift them with a total of $4,680 to use towards their first car or set them up when moving out of home. You may choose to give them the money as a reward for doing well in high school or as an 18th birthday gift. What ever you decide it would be for, it can give your child a chance to move forward on to their next goals and you will then be left to concentrate on your own future goals by not helping your kids constantly.
You get to decide whether to keep your kids updated on their 18 fund too. Sometimes it might be better to keep it as a surprise for them, but then on the other hand, it might be beneficial for your child to know about the savings, keeping them updated and teaching them about money along the way. Careful what you choose as this could back fire and make them financially lazy knowing they’ve got that money coming. You know your own kids and only you can make that decision for their best start to adulthood.
As parents, we all want to give our kids everything but we know this can also create spoiled brats and we don’t want that. Brat behaviour is naturally easier to avoid when living on a low income, but they’re your kids and I’m guessing you’d love to help them in some way??
Uni and student debt can't always be paid for by parents and shouldn't be. A small contribution like this will be much appreciated as your kids start to navigate their own way through life by dealing with everything else they need to. Its becoming much harder to find older cars costing a few thousand dollars now and the worst thing your kids can do when buying their first car is to borrow money for it when needing money for other things. It's a bad way to start money independence.
They’ll have more success in looking after themselves financially and less chance of wanting you to help them every time they make a bad money decision, all with this one little head start.
$5 x 52 weeks
But over 18 years…
$260 x 18 years
This amount doesn't even include the compounding interest it could attract if held in the highest paying account you can find. This amount could easily end up being more like $6000 by the time they are 18 years old if held in a term deposit or high earning bank account. Look for an account you can deposit into regularly but can't easily access the funds.
Find an amount you’re able to save each week of their childhood ($5 is very achievable) and work out how the final amount would best benefit both child and parents. A few dollars each week is not a lot but if that small amount is going to help everyone involved, why wouldn’t you save it for the future?
Set up automatic transfers to each child’s account from your income to make it easy. You won’t miss the money if your bank is automatically and repeatedly saving the money for you.
18 years will fly by so fast. It’s not a lot of effort for your kids’ future and well worth the very small investment you’re making for both the kids and yourself.
Comment below if you've invested money for your kids when they grow up.
I'd love to know some other ways people have done this.