Saving when you have children is difficult as it is usually the most expensive period of your life. These ‘Five Ways to Save’ tips will help you and your children to take the first steps towards financial security.
1. Get the kids involved in all money matters
Education should not start and finish at the school, so get the kids involved at planning their own savings along with understanding the family’s finances. Getting them involved early means they will have a grounding in basic household finance and you will also be surprised what you can learn from them. Being involved means everyone in the family being held to account for their actions when discussing the saving goals and the progress towards them.
2. Open up a Savings account in their name
Take the children through the process of opening a savings account (See Five Ways to Save – Savings Accounts). Let them see for themselves how the account grows through regular additions and how interest is added to the balance. They will soon start tracking the balances, especially when funds are to come out to purchase the things they really want.
3. Education first, luxuries second
Raising children is financially tough and not helped by the kids who have an amazing ability to manipulate their parents to buy the latest gadgets and fashions. However, children will go onto benefit from a good education throughout their lifetime, outlasting any new gadget and current fashion trends. Through regular discussions, the children will see the benefits of ‘learning’ and how a good education will eventually allow them to get what they want out of life.
4. Don’t overstretch yourself with the school fees
So many parents drown themselves in debt to get the kids through the best schools. This can bring enormous stresses and often means less time with the kids with the need to work around the clock to keep up with the school fees and other bills. Find a school that is within your means, spend time with the kids and if possible avoid the debt. Never forget, debt brings additional costs through higher interest rates costs.
5. Remember you
When the children leave the home what financial position will you be in? Following on from Tip 4 of not overstretching yourself, make sure that you have also put money away for yourself. By the time your kids are out of school and college, you will be running short on time to build that retirement nest egg. Time and time again parents leave their run for retirement way to late in life. As we get older work can be harder to come by and of course the threat of sickness can become a real issue to contend with.
Putting a little away early in life can make a massive positive difference to your retirement nest egg due to the effect of compound interest; that’s interest on interest. It has been quoted that Albert Einstein described compound interest as “The most powerful force in the universe”. You should check out the retirement and savings calculators on the Calculators page, an see for yourself how you can make a substantial difference to your retirement lump sum by adding a few extra dollars each week. And you will also discover why Albert Einstein was so impressed with compound interest.