5 tips for setting your child up for financial success
We all want our kids to be successful and that includes setting them up for financial success. To help you achieve it, we’ve put together 5 achievable tips for investing in their future to help give them a solid financial foundation to build upon.
1. Have clear financial goals
Start by defining your financial goals for your child’s future. This will give you a roadmap to follow and help you stay on track.
An emergency fund could be a good financial foundation. Establishing an emergency fund could help ensure your child is financially secure during unexpected situations.
Here are other examples of other financial goals:
- Car fund. Saving for a teen’s first car is a practical goal to help make a big difference as they find their freedom.
- Education fund. Whether it’s for uni or vocational training, saving to investing in your child’s education can provide them with a lifetime of returns.
- First home fund. With ever-rising property prices, saving to help your child get into the property market can be a smart long-term plan.
- Wedding fund. Regularly putting away some pennies now can be a nice gift to ensure your child has a memorable celebration without financial stress.
2. Start saving early
Time is your greatest ally when it comes to investing for your child’s future. Even if your child is just a newborn, it’s never too early to begin. Starting early also allows you to benefit from the power of compound interest, potentially resulting in a larger nest egg for your child.
3. Explore your savings options
When it comes to saving for your child’s future, consider various options:
- Kids savings accounts. These are easy to set up and make it easy to access funds. Some even offer bonus interest when you meet the account criteria, so shop around.
- Term deposits. Term deposits usually offer higher interest rates but require you to lock in your money for a specified term. Which may not be issue if you’re saving for the long term.
- Shares. Investing in shares can potentially provide even higher returns over the long term but it does involve more risk. So getting expert help may be your best first investment.
4. Diversify your investments
Putting all your eggs in one basket can be risky when investing. So to help protect your child’s financial future from market fluctuations consider diversifying – spreading your money across different types of investments – to help balance the risk.
5. Always ask an expert
Financial markets and investment options can be complex. So one of your best investments could be consult a licensed financial planner who can design an investment strategy that can help you – and your kids – achieve a financially secure future.
For more on how financial advice works and what to look out for visit moneysmart.gov.au or to find a licensed financial planner in your area check out the Financial Advice Association Australia at faaa.au
ING does not endorse and is not affiliated with third parties mentioned in this article. ING is not responsible for any services provided by third parties nor does ING accept any liability or responsibility arising in any way from any products or services supplied by the third parties.
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