By Tiffany Bass Bukow, Founder of MsMoney.com
After my husband and I had a child, it propelled our family into an entirely new financial situation. No longer can my husband and I freewheel through life enjoying ourselves selfishly as we spend money indiscriminately. Okay, we weren’t quite that bad. But my husband and I did take a year off to travel the world.
Now in a blink of an eye, junior will be flitting off to college with his knapsack in tow. If we aren’t careful, he might have to scrounge for his mere existence as he struggles to buy food. That is the worst-case scenario I can think of. But being an optimist, I know this will never happen. After all, I am Ms. Money and I am supposed to have my family’s financial life in order. Well, as much as it can be in these uncertain economic times.
After learning my lessons in the stock market, taking risks in my younger years,, I now tiptoe a little lighter through the financial maze. I used to be a bull brazenly making decision on instinct, but those times are over. Now it is time to do some careful research and put a financial plan together.
Financial planning is one of the best things we can do for our offspring (and ourselves of course!). And if we have the right attitude it can be fun. Later on we can even teach our children how to do it.
So let’s start with some education basics in saving for our little one’s future. Below are 10 ideas for you to begin.
- Read the Ms. Money articles on family planning and college planning. This will give you a jump start on the process.
- Try the interactive calculator to determine the cost of raising a child these days. This can be entertaining and might surprise you.
- Figure out how much the allowance you received as a kid is worth in today’s dollars. Talk about an eye opener! This may assist you in determining how much allowance your child should get (over the next 20 years.)
- Estimate Future College Costs
College tuition and fees continue to outpace inflation and most experts predict that this trend will continue. Use these interactive calculators to help estimate the cost of attending the school of choice and how much you will have to contribute to tuition.
- Long Term Planning for College – Saving Calculators
The costs of higher education are rising each year. That’s why saving for your child’s college education should be thought of as a long-term project. This calculator helps you develop a savings strategy to cope with these escalating costs.
- How Much Should You Save Monthly?
How much money do you need to save each month to cover college costs? This calculator shows you the monthly savings contribution and the interest rate you need to reach your savings goal.
Now that you know the basics you should be ready to put a plan together. The links below provide ideas for planning and investing.
- Education IRA and 529 College Savings Plan are an option.
- The new government tax friendly I-Bonds could be a great gift from Grandparents.
- State College Savings Plans provide multiple benefits.
- And finally, stop procrastinating and get your Estate Planning in order. One of the best things you can do for your child is make sure you have a will and your estate planning in order, so in the event of your passing on, they will save bundles of money from ending up in the hands of Uncle Sam.