5 Smart Ways to Save Money for Your Kids
This post is a part of a series we contribute to 97.3 WMEE's Mom Squad monthly e-newsletter!
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Your child's high school graduation and foray into adulthood may seem like a long way off — especially if they're still in their infancy and toddler stages — but they'll be walking across that stage and moving out of the house before you know it. While the idea of building a savings for their future to help them start off on the right foot may seem overwhelming, there are plenty of options to consider that won't have a major impact on your current financial state.
In addition, many of the ways you can start saving for your child's future also allow for the opportunity to teach them valuable lessons about personal finance, decision making, and responsibility.
Open a savings account in their name.
Most financial institutions have a savings account geared toward children that encourage both parents and the kids (as they get older) to contribute by offering small incentives (like stickers, toys, or money.) At 3Rivers, our Credit Union Buddy (CUB) Perks Club rewards kids for making deposits, saving money, and getting good grades!
Take part in fun weekly or monthly money saving challenges.
There are several fun money challenges that can help you save money over time without a lot of effort. You may have heard of the 52 Week Money Challenge, where you set aside a dollar amount that corresponds with the week of the year (Week 1 = $1.00, Week 32 = $32.00, and so on) to end up with over $1,300 by year's end. This is a great chunk of change to put in your child's savings accounts.
Aside from the 52 Week Challenge, there are plenty more to consider — like a spending freeze or "keep the change" challenge — that you can even get your child involved with, by explaining to them how it works and having them help hold you accountable, asking them to keep track of the savings, or even having them develop a money saving challenge of their own!
Open a 529 college savings plan.
For college savings specifically, 529 Plans are a smart, low-maintenance way for families to save. These plans offer flexibility and attractive tax benefits. You can also encourage your child's grandparents, aunts, uncles, and others who want to help contribute to open a 529 Plan for your child!
Set it and forget it with a share certificate.
If you have a larger amount of money to start with, you might want to consider putting it into a share certificate so it can grow over time. Simply deposit the funds into the certificate and let time and interest work their magic! At 3Rivers, we have several options available to suit your needs!
Sell gently used items your child no longer uses.
Chances are, you're already selling or donating your child's gently used clothes, books, toys, and games anyway. Why not dedicate the profits to their savings? There are several places around town that will offer cash for items your child no longer uses — Once Upon a Child, Kid to Kid, Half Price Books, and Mega Replay to name a few — in addition to options like Craigslist, Facebook Marketplace, and yard sales.
Getting your kids involved with this process is a great way to help them learn, too. Challenge them to choose a certain number of items they are willing to part with the next time they're asked to clean their room and explain why it's important to occasionally get rid of the things that they no longer value so that other kids and families can use them. Let them come with you when selling the items and allow them to deposit the money into their own savings account so they feel like they have a hand and a say in the process.
While saving for your child's future will certainly help them as they enter into adulthood, making sure they are learning about personal finance as they grow will be even more valuable to them. There are several apps that help with this, as well as programs like Sesame Street's "For Me, For You, For Later," and online games. When your kids are a little older, turn family game night into a learning opportunity with these board games, and encourage your teenager to check out our blog for some great financial literacy content!
How are you saving for your child's future? How do you teach them about personal finance? We'd love to hear your thoughts in the comments!