YOU WANT TO teach your child smart money habits, help them pay for college, or set them up for financial success as adults, it's important to jump-start saving for kids early on. However, it's critical you choose the best account for you and your family so you're not destroying your budget.
Many parents rely on financial aid, scholarships, grants, and even their personal savings accounts as a means to fund their kids education. Unfortunately, this money isn't guaranteed and may not be available when needed. However, you can secure long-term savings for your kids with a few strategic methods and accounts without having to compromise your budget and eating ramen noodles for the next 18 years.
Here are a few ways to save money for your kid(s):
Create a children's savings account. (ex. Capital One360, Ally, your local Credit Union)
Open a 529 College Savings or Prepaid Tuition Plan. (Best savings vehicle for college expenses.)
Open a Coverdell Education Savings Account. (Similar to 529 but with limited contributions. Only $2,000 per year as of 2019.)
Open a custodial account (UGMA or UTMA). (You manage the account. Minor has no access to the cash until they're adults.)
Use your Roth IRA. (Yes, it's possible ask me how.)
Open a Health Savings Account - HSA. (For adult children. It's the only triple tax-free savings tool in America today)
Set aside money in a Trust Fund. (Make your child a Trust Fund Baby. Usually opened with large sums of money)
Purchase a Life Insurance policy. (Leave an inheritance/benefit for your children)
“Take a better stand. Put money in my mom’s hand. Get my daughter this college plan...!”
Christopher Wallace aka The Notorious B.I.G/Biggie Smalls