5 practical child savings ideas
Savings for a kid is a major “Need” for parents. Early savings helps them to get enough finance for the future requirements of their kid for higher study, marriage etc.. Here are 5 well researched practical tips for parents to save money for kid as well as build a savings habit to their kid.
o Present her a cute piggy bank: Present her a small piggy bank to start collecting and putting coins into it. The ideal age to start such is 2 years. This will give her a habit of collecting coins if she saw sitting somewhere. You can give small currency notes as well. Give coins and currencies regularly. This will make her savings habit.
o Open a savings bank account in her name: This is for depositing the money she is collecting using her piggy bank. You can take her to the bank when depositing the money as well. Let her have awareness of bank deals. A required care is, select an account that have compounding interest as well as lock in period for 15 years or more. Or you will tempt to take money from this account when small requirements arise. A classic approach is, add little amount in it when you have happy moments in your family.
o Start a SIP (Systematic Investment Plan) with an index fund: Have a monthly contribution of minimum amount with a good Index fund subscription. Subscribe it as long as possible using Systematic Investment Plan (SIP) or using Dollar Cost Average (DCA) method. This will not only give the benefit of growing your money with economy and compounding basis but also, will be enough to meet all her future requirements.
o Open a trading account: Open a trading account in her name and buy shares of one company in a year. Try to buy the companies using the Buffett theory by identifying the golden stocks from various companies. Hold the same for long years. This is a best option to grow the money along with your kid grows.
o Apply for a children’s ULIP: This is a best approach to have a long term investment profit. Apply for a good children’s Unit Linked Insurance Plan by considering its low costs, high fund performance etc. Always start ULIP with waiver options to ensure the premiums will not stop in case of any sudden demise of her parents. If you select this option, company will pay the rest premium from the time of the death of parent who is the guardian for kid.
I am sure the above points will work better than any other plan you decided to have for your kid.
Please comment to let me know if you have any other better ideas that you required me to add with this article. Through your comment, I can understand the acceptance of these ideas. Please do it as much as possible and without any hesitations.
You also welcome to start a discussion on this article if willing.
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Good tips. It's always good to think long term and invest so that your children can go to college one day.
Thank you for your comment and compliments.
Sherin
We use a piggy bank. Each day we get home and put all of our change in until full and then take it to the bank. You would not believe how quick it can add up. Well you could believe. I however was not sure until we really started doing it years ago.
Great tips
Yes. It is one of the primarily practice to get financial freedom. I an in the age of 37 now and started using piggy bank at the age of 6. Still I have one but that is using by my baby girl. If you know my balance in the bank account from the coins I collected, your mouth will open for some time because of hearing some wonder. Nice habit. Keep it up till the end of your life and lead others to have such habit, especially children.
Wishes, Sherin
Great ideas, it's never to early to teach your child how to respect money.
Now a days kids need to learn savings strategies very early on otherwise it's easy to get carried away and waste all $$ in unecessary things. Tips: 1) Give kids a small allowance/week as long as they earn it with good behavior, chores, grades, etc. 2) Have the kids pay for things with their own allowance so they don't get used to credit cards or freebies (particularly from the parents') 3) Get them a prepaid cell phone. For safety reasons, all kids should have a cell phone but should also know how to use it wisely. A prepaid plan teaches kids that there are limits to the time they have available for calls (minutes) and are likely to limit their calls to necessary ones. 4) Have the kids give you a few $$ of their allowance each month to pay for their prepaid card. Helps learn to budget and will appreciate their minutes even more. 5) Have the kids set aside some $$ every month for gift-giving for b-days, holidays, grandparents, teachers, charity, etc. Teaches them the importance of sharing and giving back.
Thanks for the excellent comment from Globalitious. I will certainly consider to write and article based on this and will post to my asap.
Thanks again,
Sherin
I would also recommend that parents get their kids to read "Finance for Kidz" series of children's books.
You can find out about them at finance4kidz dot com
Prakash
Yes Finance. I have had a search on this series and found very interesting. I will soon add a list of these guides in my blog for parents and kids. I am sure, this will work for them better and my sincere appreciations for making such good recommendations. It really worth for readers as well as my blog. Sherin
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