Tips to Plan for Your Children’s Future
Most parents worry about planning for their child’s future, and for good reason. It’s natural to be concerned about long-term goals, but achieving them can be a different matter. Do you know how much you should be saving and how? Not to mention the escalating costs of education. There are several important questions you need to answer when planning for the future.
How Early Should I Start?
You should start saving for your child’s future as soon as you’re sure you want children. Saving a small amount consistently over a long period of time can grow into a substantial amount. Even just $50 a month a year over 15 years grows into $10K plus interest. It’s not necessary to have an aggressive investment portfolio to save for the future. It’s also never too late to start saving, especially if you have multiple children in your household.
What is the Value of Money?
Establishing a healthy relationship with finances can go a long way toward helping your child. Educating them about savings and the importance of responsible spending will serve them throughout their life. Teaching your children about advanced concepts may be beyond your skill set. If so, encourage them to speak with a financial professional when they’re ready.
Do I Need a Will?
The short answer to this question is yes. In 2016 only 38% of Canadians had signed a legally valid will. Your spouse, children, and other relatives may suffer without one. The death of a loved one without a will means the estate is divided according to a formula over which you have no control. Having a will drawn up allows you to decide where your money and assets will go upon your death. Otherwise, the government gets to decide for you.
What About Life Insurance?
Life insurance helps provide financial security for your family while dealing with a tragic loss. Insurance for the main bread-winner of the household is important, but everyone should be covered. Stay-at-home spouses put in as much or more work effort and their absence can cause just as much suffering. The safety net that life insurance offers is a great way to keep your kids safe. Canadian life insurance quotes can be found online in minutes and offer competitive rates.
What About Education Costs?
Tuition is only one part of the education cost for your child. Books, food, travel, and leisure money are all needed to help your child succeed. A recent study from 2018 found that stay-at-home students spend around $9,300 per year. For those who move away from home, that number doubles to over $20,000. Rent and tuition are the most obvious expenses, but groceries creep up. Campus food and traveling home can also incur significant expenses for students. Books are also an out-of-pocket expense that can add up. The average Canadian college student spends $773 per year on books alone. Even if your child’s tuition costs are covered, they will need money to cover other expenses. Parents often pick up the slack, covering these expenses out of their own daily budgets.