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How to Save Money for Kids in 2016

Parenthood is such a magical feeling isn’t it? The joy of welcoming a little person who is part of you into your family and watching him or her grow up to be a wonderful person and having the privilege to participate and play a role in the entire process; it’s such a magical experience!

But you know what, you also have a responsibility to provide you child with the means to have an awesome future and a great life and you can only do that by providing your boy or girl with a good education and background. Sweaty? Well, you are bound to be- with the sky rocketing prices of education and training, that’s only too natural.

But you don’t need to worry too much- because you have come to the right place to look for great ways to save money for your kids’ futures and by the time you reach the end of this article, you would have learnt a number of ways to safely invest your money for your child’s future.

In this article we are sharing some ways which will help you to learn how to save money for kids in 2016.

 

A 529 College Savings Account

Save-Money-for-Kids

A recent survey found that more than 50% of American adults are not aware of the existence of a 529 Plan. This comes as a shock because advisers agree that it is the smartest way to save money for college tuition’s of wards. 529s are accounts which are sponsored by states and allow parents to invest their after-tax money, which then grows tax-free and remains so if used to pay for tuition. You can also check if your employer lets you deduct an amount from your monthly pay-check for this purpose, so that your contribution is automatic. The plans offered are flexible and one can choose plans administered by any state, not only that by the state of domicile. There are also some limits as to how much parents can invest here, irrespective of income level.

 

Prepaid Tuition

Tuition

Many states let parents buy tuition at today’s rates by offering prepaid tuition plans, essentially locking in a lower price, regardless of how much tuition rises. You can use pre-paid tuition at any school, including private colleges, anywhere in the country. This makes prepaid tuition plans one of the smartest options available.

 

Brokerage Accounts

brokerage accounts for kids

Investing after-tax income into a brokerage account dedicated to your child provides maximum flexibility and the potential for high returns over the long term. Parents can set up an account directly linked to their pay-checks, ensuring transfers are automatic.

 

Dedicated Child Savings Account

Dedicated Child Savings Account

In today’s markets, savings accounts carry relatively low interest rates, but they come with other advantages, the most important of which are security and safety. These also provide great opportunities to teach children about money and savings as they get older. Some banks, including ING Direct, offer teaching materials along with kids’ savings accounts, and waive fees for low balances as well as requirements for minimum account balances. This is one of the best ways in this article on how to save money for kids in 2016.

That is our list of how to save money for your kids in 2016. You must keep in mind that your child is your future. You had the power to bring him into this world and as you very well know, “with power comes responsibility”. It is time for you to discharge your responsibility now. Don’t worry, you will all be great moms and dads. Until next time folks!

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