Now, of course you weren’t able to save money right away when you were born. The main idea here is for parents to save money for their children. I’m going to go over a few tips that I think will be helpful, especially for new parents.
As soon as the child is born, set up a savings account.
Personally I would recommend setting up a high-yielding online savings account. You will earn more interest than if you go to your local brick and mortar bank, where the interest rate may be around .5%. That way, even if you put just a little money in it, it will still earn a really good rate. It will also be convenient for you to transfer money from your checking account at your local bank to the online savings account. Less trips to the bank!
Set up an automatic transfer to go into that account, whether it be from your payroll check, or you set up a Pre-Authorized Transfer with the online institution.
You can make the amount as little or as much as you want. Even $5 a month will add up over time. You won’t miss the money, especially if it is automatically taken out of your paycheck. Also, deposit any checks or money your baby is given into their savings account. Every little bit helps!
Once there is a good amount of money in the account, let’s say, $500, set up a 529 plan.
529 plans can be a great investment for you. You can benefit from significant tax advantages and other benefits. I would contact a financial adviser and get their input on what would work best for you and your family. Now, if there are fees to contribute to the 529 plan, I would keep using that savings account and when you reach a certain limit, make another contribution to the 529 plan.
Set up a Upromise account and link your credit cards, debit cards, and grocery cards.
Upromise is free money. Why not sign up for it? Even if you sign up and then forget about it, you will still be earning money there. Upromise also offers 529 plans if you choose to go that route.
Saving money should be something that is taught to children at a very early age. I know personally as a child I watched how my parents spent money and how frugal they were. I truly believe that is a big factor in why I try so hard to pay off debt, save money, and live within (or under) my means. A good foundation is the key to success!