How to financially prepare for your child’s future

Most parents start to prepare for their child’s future as soon as they learn that they are pregnant. They buy baby essentials and sometimes even move to a bigger house or buy a bigger car just to accommodate the new life.

But one of the most important preparations parents need to consider has to do with financially securing your child’s future. With the cost of living rising each day, parents cannot overlook the importance of financially preparing for their children.

Below are tips that could help you ensure your child has a bright financial future.

Adjust your budget
One of the first steps parents need to take is to adjust their budget. This could mean cutting down on some of the things you like in order to accommodate the needs of the child. In your budget, make sure you leave some money for emergencies.

Get life cover
If you don’t already have life cover, make sure you get it and include your child on it. Life is so unpredictable and if it happens that you die, you don’t want your children to struggle. Ensure that your life cover will be enough to cover your debts and will also be sufficient to cover all expenses of your child until they become financially independent.

Save for your child’s education
The cost of education is very high in South Africa. If you want your child to get a good education, you have to start saving for their education from an early age. Even from creche, parents find themselves paying huge amounts of money - and this will only increase as the years go by. The cost of tertiary education is also very expensive. The South African government recently announced that it has added an additional R5bn to the R32bn previously announced budget for higher education. This comes after thousands of students protested saying they could not afford to pay their tertiary tuition. Even though government is spending so much on education, sadly thousands are still not covered and cannot get education due to not having enough money. This is why it is important for parents to have an education policy or a savings account for their child’s education. That way you won't have to take out a student loan or even have your child failing to study further due to lack of finances.

Teach your children about basic money principles
Sadly, many people don’t know the basic money principles. They view money as just something to spend, and this is why many find themselves in debt. But you can teach your child basic money principles from a young age. Teach them that money is not only for spending, but they need to save and share. Make them realise the value of money.

Leave a will for your child
A will ensures that your assets and money go to the people you have chosen. Without a will, there is no guarantee of how your money will be distributed. A will is a way of ensuring that your child will be cared for by the people you choose if anything should happen to you.

Learn more about how you can save for your child’s financial future with tips from well-known Financial Planner Surya Bhatia in the below video.

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