Securing your toddler’s financial future can be one of the most important things you do for your child. It ensures that they have the financial means to support themselves later in life either because you saved on their behalf or because you taught them some important money skills. If you’d like to do more for your toddler’s future finances, here are some steps you can take.
Get a Term Life Insurance Policy
No one enjoys thinking about the time when they will no longer exist. However, dying is a fact of life for everyone. For parents who have a toddler at home, it’s even more important to plan for this eventuality, and one way to do this is to get term life insurance. An insurance policy means that the income of the family’s breadwinner gets replaced if something happens. However, it’s important that other matters are attended to as well. Stay-at-home parents provide many services for free that have extraordinary monetary value. This includes driving kids around, providing nutrition services and cleaning. Money from an insurance policy can also be put toward paying others to perform some of these duties.
Start a Savings Account
Parenting comes with many financial responsibilities, including paying for college. While many parents plan for this eventuality, some don’t start thinking about it until it’s time for their kids to head off to school. However, the parents who start a 529 college savings account when their kids are small give themselves more time to save money. This takes some of the pressure off of them to earn more because it allows them to take advantage of compound interest.
Teach Them About Money
While it could be argued that you can’t teach a toddler about money, the truth is that there are money lessons you can teach children at every age. When your kids are playing grocery shopping, you can give them fake money to spend in their grocery store to teach them how it actually works. You can also teach them to put their allowance into a piggy bank.
These money games start building financial literacy in your kids. As they get older, the lessons about money can become more complex. However, starting early means that they become comfortable thinking about money from a very early age.
You have a great deal of influence on your toddler’s financial future from the college savings accounts you start for them to the money games you teach them to play. It’s important to know that it’s never too early to start this process. It gives you time to take advantage of things like compound interest, and it also gives your toddler time to really develop some money skills over the course of many years.
If you want to help teach your kids about money, try the Homey App today!