Figuring out how to plan for your family's financial future amongst the inevitable daily chaos of school drop-offs, sports clubs and dinner decisions is hard. Almost a third of parents in Ireland admit they don't have time to take their children to sports training or games. It's little wonder, then, that family financial planning often falls by the wayside.
We hate to think of our children growing up without us, but we can't predict what tomorrow will bring. We can make sure that if our family ever faces the unthinkable, however, we at least have our finances set. So how do you go about building financial security for your child as a busy parent? There are three easy steps you can take to set you on your way to ensuring a bright future for your child, even if tragedy strikes.
Choose A Monthly Savings Goal
The first step is to set a reasonable monthly savings goal. It could be as little as €10 to start. Experts recommend setting this up as an automatic withdrawal and deposit via your bank. On the first of each month, or with your first payday of the month, your bank will remove the amount you pick, and place it in your child's savings account.
Invest, Don't Just Save
Savings is great, but investing is better. Hiding away funds in a bank account is safe, but it's sort of like a farmer keeping their seed in the barn: if he plants the seed, it could grow into a fruitful harvest. Your child's savings account is the same. You can set aside a few pounds every month, and it'll be safe, but that won't get you anywhere fast. If you're willing to invest the money, however, you could end up with a lot more than what you started with. Many banks and financial institutions offer savings accounts for children with investment built-in. All it takes is calling one of them and setting up an account.
It is also worth considering family trusts, which give you more control of your assets in the event that you pass on, and ensure that your money goes straight to your children. They are legal arrangements in which a trustee is assigned to distribute your funds to your beneficiaries (in this case, your children), and they offer significant benefits. Investing in estate planning is an additional way to secure child's future.
Purchase Life Insurance
Lastly, if you haven't already, it's a good idea to invest in life insurance for yourself. In the event of a tragedy, life insurance will ensure your child has financial stability. No one likes to think about leaving their children behind, and the monthly payments may seem discouraging, but the peace of mind it ultimately brings is worth it. And, it's very easy to get started: a simple phone call is all it takes.
Financial planning often gets neglected in busy modern life. However, carving out some time to make sure your finances are in order and your children are covered in the event that the unthinkable happens is well worth the investment.
