Every parent wishes to gift his/her children a secure financial future. Don’t we all wish that our child would be highly educated, and never face any financial constraints in that regard? Ideally, individuals should arrange for kids funds from their own income, so that they can draw money from it, as and when necessary, for educational expenses of their children. Education expenses are, by no means, low, and if sound children investments are not made, covering these expenses can prove to be rather tricky. Fortunately, expert financial planners have laid down a set of investment advice for children. Parents can, by following these broad guidelines, easily make all necessary financial arrangements for their kids.
All investment plans for children require parents to start to save from an early stage of their lives. Education expenses are continually on the rise, and there is no way to predict the figure at which these expenses will stand in a few years’ time. Hence, it makes sense to put away a part of the present income regularly in your child’s funds. When the time comes to pay for your child’s college fees or other charges, this fund can be accessed to get the money.
Investment advisors are also of the opinion that parents should invest in relatively ‘safer’ financial instruments, as their kids grow up. Particularly when your child becomes eligible for entering college, you should be having your money in bonds, securities and other such low-risk money market instruments. The risk-level associated with stocks and such instruments is high (albeit with a potentially higher rate of return). It is not advisable to risk losing money on stocks, thereby failing to contribute to your child’s funds. The ‘lower-risk’ bonds represent a much more sound option for your children.
Professional planners who provide advice for children also encourage parents to boost their own retirement plans. Contrary to popular belief, your savings can come in more handy for spending on your child’s expenses if such savings are made in your account. Although tax rates are lower on children’s savings, drawing out money from them for making kids funds may be somewhat difficult.
At all stages of making different children investments, it is imperative that you let your kids and other family members know of the plans you make. Kids themselves would feel secure if they know that their parents have made sound investment plans for them. Funds for children funds are extremely handy for parents as well, since they allow the latter to sponsor their kids’ education without any additional financial pressure. Follow the set rules of investment advice for children, and help your kid have a bright, financially secure future.