Every parent wants the best for their child, which is probably why you are reading this article. Financial uncertainty will always cause panic, anxiety, and stress, especially for a first-time parent, but there is a way to ease the new stress you are experiencing: financial planning.
With financial planning, you can prepare yourself and your child for future challenges you might face. You can also secure your peace of mind and guarantee that you can overcome money problems with much ease.
Financial Planning Guidelines for New Parents
Here are some of the steps you can start with to make sure you and your child are all set for the future:
Step 1: Open up a Savings Account for Your Child
One of the best gifts you can give your child is a good financial education. Start by opening a savings account on their behalf. Put a few dollars into it every paycheck, and when your child is old enough to understand, introduce them to the value of saving.
Through this simple step, you can help your child establish good financial habits and show them the fun part of it. It will also help you financially prepare for their future needs, and it will serve as a way towards achieving their future financial goals.
Step 2: Save for Their College Tuition
Student loans in the US typically amount to tens of thousands of dollars. According to the latest debt statistics, the country’s student loan debt is now around $1.68 trillion. Instead of working and saving for their futures, graduates end up paying off their student loans for many years.
Education costs continue to rise, and it may become even more challenging in the years to come. College is a huge financial investment, so try to prepare as early as you can.
Step 3: Involve Other Life Aspects When Financial Planning
While this article encourages you to prepare ahead of time, you should also keep in mind the importance of facing financial challenges one at a time. Thinking and preparing for the future is indeed helpful, but you do not have to think about it all the time. What you need is to find the right balance.
Putting a large chunk of your budget towards your child’s college education may be an act of love, but you have to remember that there are daily expenses and bills that you also need to fund.
Apart from those, you also need to build an emergency fund and plan for your retirement. Your emergency fund should be worth at least six to nine months of expenses. Having one can help you survive unpredictable times, such as loss of income or a sudden illness. It is also essential to have a retirement fund to ensure that your future will be comfortable and stable.
Learning to properly budget your money for all the things that matter will help you become more financially secure in life in all of its aspects.
While being parents can be an exciting experience, it also comes with many responsibilities. Instead of stressing out on every detail of your daily financial struggles, make a plan, and follow through with it. If things seem overwhelming, you can start with the steps mentioned above. Just work with what you have and improve your methods over time.
If you are looking for the best money market accounts to keep your money, we can help you find the best-suited one for you. At Good Neighbors Credit Union, we provide our clients with the best tools and resources to manage their finances. Contact us to learn more about services.