21st October: Financial planning is important for safeguarding the future of our children. And it becomes all the more relevant in these tough economic times marred by recession.
If we want to provide our children with financial security, we must adhere to financial planning.
Discuss economic issues with children--As parents, we must take courage to discuss economic issues with our children. Parents need to explain various economic terms to erase their fears and doubts.
According to chief executive and president of DoughMain, Ken Damato, parents should never undermine what their kids are listing and seeing around them every day.
And, in these current tougher economic times, the role of parents becomes all the more important to help ease fears and doubts of children with regard to financial uncertainties prevailing around, adds Damato.
This can be done by discussing some basic economic terms and issues with children in accordance with their age, he asserts.
Financial planning for your children—
• School education—This is among the first steps of financial planning for your children. Parents need to start saving immediately after the birth of the child either in bank or through debt mutual fund or postal recurring deposits. This can help in paying for your child’s school admission and tuition fee without any worries.
• College education—To catering to long-term needs of your child’s education, you need to begin making investments after the birth of the child. Go for a life insurance mutual fund offering a good life coverage. You can opt for a monthly payment if you are a salaried couple. You can choose state-sponsored plans where your money multiplies without any botheration of paying taxes provided the amount is used for paying college costs.
• Retirement savings—Retirement savings are as important as savings for your child’s education. Retirement savings ensure your child does not have to support you in your retirement period.
• Designing a will—A will is essential for securing your child’s future. Only by signing a will can a parent designate guardians. So, you must make sure to draft a will through any attorney. You may also write your will with the help of a computer software. However, it’s advisable to hire the services of a good lawyer.