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.
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.
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.
General educational support
Even before your child gets to college it’s well worth saving some money for their general education. There are plenty of educational resources that can be helpful for kids, from books to learning games and apps. You might want to support your child with extra curricular activities, whether it’s museum trips, art workshops or sports clubs. All of these things cost money, and so it’s a good idea to have some savings. Perhaps you’ve considered boarding school as an option for your child? It can be expensive but there are plenty of benefits of boarding school.
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.
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. Or when it comes to dental emergencies, all you need to worry about is getting to your dentist, for their family-friendly dentistry – rather than the bill! 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.