Children are expensive, it’s not a secret and never has been. The average child will cost their parents nearly $250,000 between being born and their 18th birthday. Luckily, their wants and needs are relatively frugal when they are young, but give it time, and the cost of those ‘must-haves’ will start to rise steadily. Luckily you can plan ahead. It’s never to early to start saving for those big purchases so that your child can make the most of their life.
You may choose to have a separate fund for each of these, or you could just have one savings account for everything. Either way, the earlier you start, the better. Of course, this is a fairly comprehensive list, but that does not mean you have to have separate savings for all eventualities; money, unfortunately, does not grow on trees, so even just saving for one of these will make a measurable difference.
First Car
Just like mobile phones, the internet, and multiple TVs around the home, this luxury has practically become a necessity. On the positive side, once your child has finished their driving lessons and got their permit, you won’t have to be the taxi driver for them anymore. How much you need to save for this particular purchase is entirely up to you, how you like to operate, and what kind of area you live in. You might opt for a simple and cheap car, just to get them on the road. You might decide that you don’t want to trust an older cars safety rating and only save up enough for a downpayment on a new car. Newer cars typically are more fuel efficient and have more safety features than older models. If you can get a good deal on a new car, then this may well be a more cost-effective option for you. However, let’s not forget that small accidents can happen for new drivers. Misjudging a corner, or not noticing a bollard, can result in bumps and scrapes on their new pride and joy. Having an older car with cheaper replacement parts (which you may be able to fit yourself) could help to ease the financial blow that comes from these almost unavoidable hiccups.
College
This is the big one. Of course, you spent their whole life trying your best to educate them in the hope that they would get into a good college and become successful, but the downside is that the better schools also cost more money. Unless you happen to be an oil tycoon, you probably can’t afford to pay for their entire education fees, and that’s fine. But having a little bit of money set aside to help them manage with the day to day living costs will make a huge difference. You should also bear in mind that they are essentially moving out, so they will need their own cutlery, cooking appliances, laundry basket and all the other little things they take for granted as just being there. You’d be amazed how quickly the costs can rack up, so being prepared for it means you don’t have to wave them off with only half the supplies they need to support themselves. It also takes some of the stress of the experience away, allowing you to truly enjoy those last few weeks before they fly the nest.
Wedding
Depending on how traditional you and your children are, you may need to put a rather hefty contribution towards a wedding. Even if your child and their partner decide they are going to finance the entire thing themselves (well done them), you may wish to help out with some of the costs. The joining of two families is a fantastic opportunity for everyone to really get to know each other and make some memories. It would be a shame if your children had an idea in their heads about how the day should go, but they just couldn’t get the funds together in time themselves. Having some money already set aside for this occasion would make a fantastic wedding present and allow them to really enjoy their day. You don’t have to pay for the entire reception, but helping with the deposit for their dream venue, buying the bride’s dress, or paying towards the honeymoon are all good ideas to lend some parental support.
House Deposit
This may be something you expect your child to fund themselves, as you might have done for your first property. However, with housing prices soaring higher than ever before, and wages barely keeping up with inflation, it can be very difficult for young people to get a deposit together while also paying rent. With the best mortgage rates being reserved for those with higher deposits, it can be an incredibly frustrating journey to make. An extra few thousand on top of the deposit they’ve managed to save for, could be the difference between qualifying for a better mortgage rate and not.
The Unforeseeable Expenses
Here we are entering the realms of speculation, but you never know what life will throw your way. Your child may fall ill while on a school trip, and your family’s health insurance might not cover everything. They may be given a tremendous opportunity to go to a tournament or event on the other side of the world, but you need to pay the cost of travel and accommodation. Hopefully not, but you may even have to bail them out of jail after defending themselves in a fight (obviously your child would never throw the first punch). You can never know what is around the corner, so it’s always advisable to have some funds tucked away for those situations that blind-side you on some idle Tuesday afternoon.
Watching your child grow into adulthood is a fantastic and immensely rewarding experience. By following these tips, you give yourself the opportunity to enjoy all that parenthood offers, without having to constantly worry about unexpected events taking you by surprise. Not everything on this list may occur in your child’s life, or even be relevant. But having that safety blanket in saving can help you rest easy at night, safe in the knowledge that their future is taken care of.
Joan Cajic says
This is really great advice and really makes one think on how we need to plan ahead on everything.
Amber says
Yes, I always try to save for my kids. Though I did tell them we’re not paying for the entire college. We just can’t do it. Some, yes. And the wedding they’ll have to budget. We spent less than $500 on ours, so it can be done!
Joanna @ Everyday Made Fresh says
These are all great things to help your child save for. However, I am depending on my children to pay for their own wedding, like we did. I am also not helping with a down payment for a house. They can rent and save, or choose to take out a loan that includes their down payment.
Nandita Gupta says
I do save for my kid. We as a family invest too but you have given some great advise here. Thanks a lot for the post!
Dana says
Nandita, I think it is great that you invest as a family!
Ingrid Rizzolo says
I agree that parents need to save for their college education. College costs are high Right now my daughter is in college so I know how important it is to save for college. Next I will have to draw down on my savings for her wedding.
Dana says
Ingrid, it is amazing how costly college can be. I am sure your daughter is extremely appreciative of your assistance. I was so thankful for my parents helping me out too!
Natalie says
I am so thankful my parents invested money for my education. It was definitely a big help for paying off tuition.
corinne & kirsty says
University would be the main reason why i’d save money for my kid really early! wedding another one but hopefully, by then, they’ll be big enough and I would not have had to provide for them in a few year, making ti possible to save more!
Collins Nwokolo says
This is such an insightful article. Saving for your children’s future is very essential indeed.
http://www.youmustgethealthy.com
Dana says
Thanks Collins!
Hannah Marie says
These are such great ideas!! I wish my parents had helped me but at the same time, I learned a LOT of discipline paying for things myself (to say the least!).
Dana says
Hannah, great point! To learn the value of a dollar at a young age is a great lesson. I am still working on that with my boys 😉
Ana De- Jesus says
Woah I had no idea that the average child will cost their parents nearly $250,000 between being born and their 18th birthday, that is enough to buy a small flat! It is definitely a good idea to save up from a young age x
Dana says
It’s crazy right, Ana?!
Tori says
My parents did buy me my first car – used of course. I plan on doing the same for my son but maybe get something that he and his dad can work on and then take over as his. I do hope to put away a fund though to help with other big expenses along the way.
Dana says
I love the idea of getting your son a car that he and your husband can tinker with!!
Claudia Krusch says
We started to save as soon as we had our Son. He is about to start his first year of college. I am so happy we were able to save enough that he will not graduate owing a huge debt.
Dana says
Claudia, that is awesome! We started saving when our boys were little as well – our state offers a prepaid college plan and it’s a great program. I believe other states offer something similar. It makes me feel better as well, knowing that they won’t have a huge financial strain after college.
Soonjoo says
This is so true. Child is expensive from college to buying new home. Preparing financial stability is must have before having child!
Dana says
Yes, yes and yes! They are expensive but so worth every penny!
Sudipta Dev Chakraborti says
This is a very useful and informative article. Parents always want the very best for their children. Right financial planning and savings will give them the wings to fly and achieve their dreams.
Dana says
Agreed and very well said, Sudipta!
Sapna Krishnan says
We have some small investments for the child and ourselves. But more than anything, I am worried about her education. It has turned into a business and I hope to be able to provide her with the best. Your post is a gentle reminder to watch my spending, for the future.
Dana says
Sapna, I worry about the education expense aspect as well. I am sure you will provide the best for your little one 🙂
Jacqui Odell says
We started a savings account this summer for them. It helps to be prepared.
Dana says
Perfect start Jacqui!
melissa says
These are great. I started to save before my son came into the picture and I know I have to continue that way.
Dana says
Thanks, Melissa! Kids are expensive but totally worth it!!
Hey Sharonoox says
Agree with the idea of saving for childs future. We started saving for our little guys when he’s 3 and still doing it. It’s a saving program for his tertiary education.
Kitty says
I totally agree… I am a new mom and I am gonna invest money for our child’s education and this would be a great gift for paying of their tuition ☺️
Mark Jr. M. says
Good points, nice article. I am very grateful to my parents. They support me to the end of my collage. I feel their backup and motivation at each period of my life. But at right time, they shows me that i have to take my decision and its results. As a pre-father, i am going to asssitance my kid, as my parents did.
Dana says
Mark, it sounds like your parents were very supportive and that you will one day be just like them for your children! 🙂