November 17, 2020
Guarding Your Child’s Financial Future: Infant Savings Accounts
Babies are expensive and locking additional funds away in a savings account may seem like a burden, but it provides amazing returns. It doesn’t take a large initial investment to help protect children’s finances and prepare them to grow their own money in the future.
Time Is Money
Everyone wants to do their best for their children, and while many parents hope or even plan to help pay for early expenses like college, these costs can become a tremendous financial burden. The best way to prevent good intentions from creating monetary strain is to start saving early.
Savings accounts grow over time. The earlier you begin saving, the more your child will have when they become an adult. Even a relatively small investment during a child’s infancy will grow considerably over 18 years, and parents don’t have to do a thing besides sit back and watch the account grow along with their baby.
Give Your Child Options
Money is freedom, and having a dedicated account ready when a child comes of age gives teens and young adults a crucial head start. A savings account can protect them from costly student loans if they want to go to college. It may let them buy a safer car when they join the workforce, or they may use it as a down payment on their first home.
Every child has different dreams and ambitions. A savings account that’s accumulated interest since their infancy funds those dreams, working like a trampoline to boost them into adulthood.
Prepare for the Unexpected
While everyone hopes a child’s savings account will go towards education, a new car, or even travel, sometimes life doesn’t play fair. The unexpected doesn’t give parents time to prepare, and having resources available to deal with car accidents, illness, injuries, etc. helps keep kids safe.
Good Habits Start Young
Children learn financial literacy at home. Having their own savings account, even if they cannot access it until they’re older, gives children of any age a window into how banks, finances, and investment work. Simply showing children once a year how their money has grown and explaining how that happened may help young people make better financial decisions as adults.
Unlike stock options and investment portfolios, a savings account doesn’t disappear or diminish with economic changes. There are plenty of high-interest savings accounts that foster reliable, steady growth with very little risk. While there’s certainly a place for riskier investments in adult finances, safeguarding your child’s future with a savings account balances financial growth and financial security. This means your 17-year-old won’t suddenly lose the money set aside for college tuition because the DOW took a dive.
Parents work hard to protect their children. They lock cabinets and drawers, check the paint in their home for lead, and fight to master car seats to make their baby’s life as secure and comfortable as possible. An infant savings account follows the same principle.