Kids and Money

Making good decisions is important when it comes to investing for children. Here are some important things to consider regarding kids and money:

• Set goals for the future
• Begin saving early
• Research financial institutions and programs

Parenting is one of the most rewarding jobs out there, but it's also one of the most challenging. Raising kids involves providing for our children's needs in a variety of different ways. In addition to meeting their needs for comfort, food, shelter, education, and other essentials, we must also plan for their future. Planning ahead to leave them with the best financial start in life is just as important as providing for their day to day needs.

Fortunately, there are a number of ways to plan for your children's financial future. When it comes to kids and money, these tips will help set you on a solid path with strategies to save money for the future. Perhaps the most important of these strategies is investing for children.

But, before we begin talking about kids and money, we need to take care of our own financial future so they don't have to take care of us! A great way to do this is to follow Dave Ramsey's common sense approach to handling finances. He offers plain, simple, and sometimes painful advice that's broken down into small manageable baby steps that really make it possible for anyone to secure a financially solid future.

And, before making any decisions about kids and money and investing for them, it's important to have a clear understanding of your goals. Are you saving money for college? If so, what is your budget, and what kind of college do you expect your child to attend? There is a big difference between the cost of community college versus an Ivy League university.

One of the most cost effective routes to college is to see if your child can obtain college credits while they are still in high school through advance placement courses. I personally knocked off twelve college credits this way! What a cost savings that was. The next step which, is not always the most popular choice with kids is to attend community college for general education credits, then transfer to a State university to finish their undergraduate degree.

This tends to be one of the most cost effective routes because when kids first enter college, they usually don't know what they want to major in. It's a lot nicer on your wallet to let them figure this out at the community college rate rather than the state, private, or Ivy League rate. I know a few frustrated parents whose kids dropped out of private college after two wasted years of trying to figure what they wanted to major in.

Another plus to community college is that it's a lot like high school. In other words, it's a lot less intimidating than a traditional university. Kids have an easier adjustment period, make more friends, get better grades, etc.

And, no matter your wealth, it's always a good idea to make your children work while they attend college. Kids need a good sense of the value of money, and working to help pay for college can do just that.

Now, if your child doesn't plan on attending college, think about other ways that your children might use these savings. Are you considering saving for a major purchase like a vehicle for them? Are they going to attend a technical school instead of college? Now, once you have a clear picture of how and when you want to use the money, you can start saving money with these goals in mind.

The ideal way to go about it is to invest a little bit at a time. Having the money directly withdrawn from your account is a good idea. Even if you can't afford large sums at once, you'll be surprised at how your money grows in time. Starting early is important, because if you start saving just a couple of years before your kids attend college, then you won't have enough time to let the money grow and see a return on your investment.

There are a number of different options in terms of financial institutions and types of accounts. It's important to take the time to do a bit of research to find out which type of plan works best for your goals. Do you have many years to watch your savings grow, or just a few? If you have years, are you going to put it in a mutual fund, and if so which one. If you don't have a lot of time, would a money market account work for your goals? What about a CD? Do you want low, moderate, or higher risk investments? Does your bank or another financial institution have low-fee programs with low minimum investments to help you get started?

These are important and confusing factors when it comes to kids and money and the best strategies to save for the future. So confusing in fact, they make many of us want to run, hide, and forget it all.

So, please be sure to check out Dave Ramsey's website for some sound financial advice to empower you in simple to follow steps with all your financial needs from kids and money to investing to cleaning up debt... it's all there. They even have a a wealth of information on investing for your future and provide professionals in your area that can help you make the best decisions. I don't make any money from recommending Dave's site to you, but my husband and I do use the program and both of us highly recommend it.

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