No matter what stage of life you are in, saving money is always a good idea. However, saving money for her children can be a top priority as a mother. After all, you want to give them the best start in life possible. But let’s face it, parenting is expensive! According to a recent U.S. Department of Agriculture report, the cost of raising a child from birth to age 18 is upwards of $233,610. Ouch!
Saving is one of the best ways to reach that amount, but it can be hard to do when you feel you are already stretched thin. Here are five ways mothers can save money for their children:
Invest in a 529 Plan
A 529 plan is a state-sponsored investment account that you can use to cover qualified educational expenses, including tuition, room and board, books, and more. The account’s earnings are tax-deferred, and in some cases, withdrawals are tax-free. That means the account can grow over time while providing tax savings down the road.
Savings Account For Your Child
You can open a savings account at most banks and credit unions in your child’s name. This is a great way to start teaching your child the importance of saving money. In addition, many banks offer unique benefits for minors, such as no monthly fees or minimum balance requirements. You can also consider getting a debit card for your child so they can begin learning how to use credit responsibly.
Cut Back on Expenses
One of the best ways to save money is to spend less. Take a close look at your budget and find areas where you can cut back on expenses. For example, you might have to eat less often or cut back on unnecessary purchases. Once you have freed up some extra cash, you can put it towards savings for your child.
Get Help From family and Friends
If you’re looking for ways to jumpstart your savings, consider asking family and friends to pitch in. This could be in the form of cash gifts at birthdays or holidays or simply contributing to a savings account that you have started for your child. Every little bit helps, and it’s nice to know you have the support of loved ones as you work towards saving money for your child’s future endeavors.
Consider Setting Up Automatic Transfers
One of the best ways to ensure you are consistently saving money is to set up automatic transfers from your checking account into a designated savings account for your child. This way, you won’t have to remember to make manual transfers each month. You can automate transfers for any amount, but even transferring $50 per month can add up over time.
Saving money for your children may seem daunting, but it is doable with some planning and discipline. But there is a reality in saving this money, and one that you should always prepare for: bankruptcy.
Bankruptcy can happen anytime, even if you’ve saved up for it. For example, college fees are one of the most expensive things you’ll pay for, and if your child decides to attend an out-of-state school, the costs can be even higher.
College costs can start piling up on your credit; before you know it, your savings aren’t enough to cover your child’s college expenses. Avoiding bankruptcy is something that every mother should do despite not expecting it. Here are some of your options:
Get a Reputable Lawyer
One of the best ways to avoid bankruptcy is to get a consultation early on. A reputable bankruptcy attorney can certainly help you make the best decision for your unique circumstances. They can also help you strategize your assets to pay for your credit, and they can also help you save even more money in the long run!
Create a Debt Management Plan
Working with a credit counseling agency, you can create a debt management plan that will help you get out of debt and avoid bankruptcy. This type of plan can be beneficial if you struggle to meet ends.
Look Into Debt Consolidation
Another option to consider is debt consolidation. This can be a great way to save money on interest and get out of debt more quickly. There are many ways to consolidate debt, so be sure to explore all your options before making a decision.
Refinance Your Home
If you own a home, you may be able to refinance your mortgage and use the equity in your home to pay off other debts. This could help you avoid bankruptcy and keep your home.
Save as Much Money as Possible
Last but not least, you should still try to save as much money as possible. The more you have saved, the less likely you are to need to declare bankruptcy. Of course, you can never have too much saved!
Saving money for your children is essential, but it’s also important to be prepared for the worst. No one wants to declare bankruptcy, but it is a reality that many families face. If you are struggling with debt, explore all your options and get help from a reputable source. As always, save more money than you intend to save; by doing this, you can help ensure that your family is prepared for anything.