4 Money Milestones Every Parent Needs to Accomplish Before Their Kids Turn 10
We get it. You’ve been busy since you found out you were expecting.
Baby preparations turn into sleepless nights turn into homework-filled afternoons…
So when it comes to money, you’re probably just trying to pay your bills on time, right? That’s a good move, but you’re probably forgetting about some bigger milestones you should achieve before your kid gets too old.
No need to overwhelm yourself and do these all today. We set these up in order of priority, so let’s start with the easiest — yet, arguably, most important — first.
Before They’re Born: Secure Their Future
Have you thought about how your family would manage without your income? Without your support? Maybe you’ve worried about this a little too much since your little one has entered the picture.
That’s totally normal, but you might be able to tame a few of these anxieties by securing life insurance, which will help ensure your family is finally secure if anything happens to you.
You’re probably thinking: I don’t have the time or money for that. But your application shouldn’t take more than about five minutes — and you can secure a policy starting at $5 a month through a company called Bestow. Yeah, no need to pay hundreds of dollars a month.
“The biggest mistake I see millennials making is being duped by insurance salesmen,” says Andy Yadro, a financial planner with Googins Advisors in Madison, Wisconsin. “Everyone needs insurance, but a very small subset of young people need the insurance that is sold by most financial advisers.”
So if you’re under the age of 54 and want to get a fast life insurance quote without the medical exam, pushy sales calls or even getting up from the couch, check out Bestow. The company is built around one concept — helping you get the term life insurance policy you want, simply and fast.
It just takes five minutes to answer some basic lifestyle questions, and you can get quotes for up to $1 million in coverage without a medical exam. If you’re approved, you can personalize your coverage to fit your budget. You can change or cancel your plan at any time.
Now you can rest a little easier tonight.
When They’re 2: Open a High-Yield Savings Account
Remember when you turned 18 and jumped ship into adulthood? Errr, well, tried to jump into adulthood? For many of us, that was a tough time. If you want to give your kid a little boost, set them up with a savings account.
You don’t have to contribute anything major. Think about it: If, when they’re 2, you start putting $25 into an account once a month until they turn 18, that leaves them with nearly $5,000. That’s enough to help with the cost of college living, starting a small business or backpacking through Europe.
And if you stash the money in a high-yield savings account, the balance will grow even more, thanks to that sweet, sweet compound interest.
When They’re 6: Talk to Them About Money
If you’re going to work hard to build your kid’s savings, then you probably want them to use it responsibly, right? That’s why it’s important to teach them the value of a dollar early on.
One fun way to do this? Take them grocery shopping. Give them a mini-cart or basket, and let them walk through the store with you. Point out what’s considered a want and what’s considered a need. Fresh doughnuts from the bakery? That’s a want. That loaf of bread? That’s a need.
Another classic way to teach kids about money is to set up an allowance for chores. Of course, they’ll want to spend this money on a toy. That’s OK! This exercise helps them understand the value of a dollar.
Before They Turn 10: Involve Them in Financial Decisions
As your kid gets older, they’ll want to participate in every after-school activity, attend every summer camp and buy every new piece of technology.
Instead of feeling guilty — or caving and overspending — let your child hear and participate in your household conversations about money.
“Classically, parents will go behind a closed door to talk about saving, budgeting and investing,” says Maggie Johndrow, a financial adviser at Johndrow Wealth Management. “But psychologists have found that will make your children think finances are scary, taboo and something that’s not to be talked about in the open.”
Instead, Johndrow encourages parents lay it all out there. Let your child know your budget for after-school activities, for example, then work together to choose what’s affordable.
“Empower them and teach them by giving them that choice,” Johndrow says.
Now, that wasn’t so bad, right? Almost easier than remembering to pay your bills each month.