We all want the best for our children. We hope that they will have a better life than we had, that they will be happy, healthy, wealthy and wise. You can support the happy and healthy by teaching them good habits and spending quality time with them. You can encourage the wise by teaching them what you know, by giving them your values, and by showing interest in their school and encouraging their mental growth. And, you can help make them wealthy – or at least financially secure – by role modeling a good work ethic and putting a plan into action that includes the following:
1. Make yourself financially stable
If you are worried about money, or if your adult child is worried that you will not have enough in retirement, then you don’t do your children any good. So, as a financial consultant of television fame Suze Orman suggests, take care of your own finances to help with your child’s future.
This means building enough wealth to keep your family secure and saving for your own retirement. This can be done by simply saving money in a savings account. But you’d rather see your money grow faster. Consider ensuring your future by investing in CDs or even investing in the purchase of structured settlements and lottery annuities for those who need cash now. This is a nice, safe way to ensure your financial future.
2. Name your children in your health and life insurance policies
Emergencies happen so you need to always ensure that your child has health insurance. This is the best way to keep them safe and ensure the financial future of the entire family. If you do not have health insurance through your work and cannot afford it, look into your options. There are many local, state and federal programs to help insure children whose parents cannot afford it.
It is also important that you have life insurance policies that will provide for your child just in case something happens to you. Should tragedy strike you do not want your last thought to be worried over your child’s financial future. Get a life insurance policy that can support them until they are old enough to support themselves, and keep the policy current.
3. Convert your savings into assets in your child’s name
In addition to a life insurance policy you want to be sure that you have a living trust so that your spouse and/or child can inherit all that you own without paying the expense of probate court. Hopefully you live to be a hundred, but if not, you want to ensure that those whom you love are protected. You can create a trust at minimal cost; this is particularly important if you have a lot of equity in your home, a lot of money in savings, or other assets to protect.
4. Put money into a 529 college plan
A person who holds a college degree will make far more money in their lifetime. Putting money away in a 529 college plan is a great way to help them go to school without accumulating debt. Every state has their own 529 plan, and they all work just a bit differently, so you need to investigate the one in your state. But in short, a 529 plan usually has two options. You can actually buy a certain number of years of college tuition, paying at today’s rates and making monthly payments, or you can invest money into a mutual fund with that money growing interest free and not being taxed in the future as long as it is used to pay education expenses.
This is the time to start helping to secure your child’s financial future. With a little know-how and the above tips, you can do it.
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