4 Things every parent should do today to secure their children’s future
Last updated on 1st April, 2020 at 05:00 pm
1. Set up an education savings fund
The best time to save for your child’s education is before they are born. The second best time is now. Reports show that education costs (from primary school to university) are set to rise by 9% in five years. That means public school could be costing more than R50 000 per year by 2024.
Invest in an education policy or unit trusts. Speak to a financial planner who can assist in finding the right investment for your specific needs. You can also start small – by opening a savings account and putting in as little as R250 a month, gradually increasing your monthly installments as you are able to. Every bit saved will help.
2. Teach your children how to be financially savvy
“Studies show that 74% of youth are not involved or included in the daily financial management of their household. However, results showed that children who are involved display a higher propensity to save, more cautious spending behaviour and a better understanding and knowledge of financial products,” says Kathryn Main, founder of Money Savvy Kids (www.moneysavvykids.co.za).
Talk to your children about money and savings, get them involved in financial decisions, and allow them to learn through play (for example: giving them a budget to make cookies or crafts, and then allowing them to sell to family and friends and see how much they make and what they spent). “Children as young as three-years-old start to develop the cognitive skills necessary to understand basic financial concepts, such as identifying coins, how to count change, and matching small amounts of money to items they want to buy at the tuckshop every Friday,” explains Main. Don’t underestimate their ability to be taught about money and saving early on.
3. Invest in life insurance
Your children rely on you financially – so to ensure their financial security should you pass away, a life insurance policy is an important investment.
Seek out the advice of a financial planner by clicking here, to find the best life insurance policy for your family’s needs and budget.
4. Make sure you have a will
“Everyone should have a will in place to ensure that the distribution of their assets at death is done according to their wishes,” says Legal Aid SA’s KZN Communication Practitioner, Bongani Mahlangu. A will gives clear instructions as to what should happen to your assets and policies in the event of your death. Without a will, you put your children’s (and spouse’s) financial future in jeopardy, as the state becomes involved and makes financial decisions on your behalf. This could mean that your children receive very little, if anything.
Drafting a will can be a simple process, and one you can oversee yourself, as long as you follow all the steps to make it a legal binding document. Click here to read about the key things you need in your will.
You can also draw up a will with the assistance of a financial planner.
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