Parents have numerous responsibilities and it’s often difficult to start planning for things like your child’s college fees when they’re still in diapers.
However, this article will hopefully give you a piece of mind as you scour the internet looking for the right option for you.
Before we begin, we want you to know this: There is no perfect way to save for your child’s future. With dozens of different ways to save and invest, families that do well are saving in a way that suits them. The best way to save money for your child is to figure out what options align with your current financial situation and going from there.
Step 1: Know exactly what you’re saving for
Have a money saving plan
Before you should even begin looking at the numbers, start asking yourself what it is your saving for. Many parents start saving without a plan. Sure, putting aside a few dollars each week is better than nothing – don’t get me wrong – but knowing what it is you’re saving for can allow you to benefit from the various savings plans and accounts out there that are tax-advantaged.
For example, a 529 savings plan is tax-advantaged savings account designed to encourage parents to save for future educational costs, such as college. Imagine those few bucks put aside each week were put in such an account? You would save a great deal and make it that bit easier on you and your family.
Step 2: Think differently
You can do more than just saving
Savings plans are great because they’re low risk and your money is guaranteed. but such piece of mind comes with a lower rate of return. UGMA and UTMA accounts allow you to invest and transfer assets to your child and once they reach the age of majority, they can take control of those assets. Like a 529 Savings Plan, UGMA and UTMA accounts offer tax advantages too and come with the added benefit of not being restricted with how you use that money, once of course you are benefiting the child in some-way.
Investing can drastically increase the probability of you reaching your investment goals. There are smart ways to save money but there are smart ways to make money too. The issue with many of the brokerages and online platforms is that they don’t teach you how to invest safely. Many simply act as a way for you to place orders but you few teach you how to invest and that’s why we at Loved aim to solve that problem.
A Loved account is more than just a custodial account; it is an investing app on a mission to help families grow financially and make both them and their child’s dreams come true. Our platform offers you the opportunity to invest in hundreds of different stocks and ETF’s while educating you on the world of investing. We want you to make smart choices with the investing goals you can plan for through the app.
With as little as $5, you can open an account today and start investing!