Personal Finances

Setting Up Your Baby Financially

You are providing food, clothing, shelter, and love for your newborn. Why not also provide a good start to his or her financial life? Early exposure to this can teach your child the importance of saving and investing. Here are some examples to consider:

Savings accounts just for your baby

Some parents like to set up a special savings or certificate account for their new baby and add to it periodically. Often, when the child is older, he can begin adding his allowance, babysitting money or lawn-mowing earnings to it.

Ask about accounts for children at your financial institution. Save early for your child’s education.

Inquire about other accounts for children at your bank, credit union, or other institution. Some of them offer special accounts and special incentives for opening and keeping an account.

College savings plans

The best time to start saving for your child’s education is before you discover you are going to be parents. Unless you have a wealthy aunt with money to spend, you should know about two big savings vehicles that the government created for you. You can save money tax-deferred in these special accounts just for educational costs:

529 plans. These plans can help you save for future qualified educational expenses;