VOLUME 1 / ISSUE 1 WINTER 2024
PROFESSIONAL SERVICES
BY ANN ALSINA SAVING FOR YOUR CHILD’S FUTURE AT EVERY AGE When I was pregnant, I spent hours researching – which are the best bottles, pacifiers, and diapers? Then came preschools and activities, pediatricians and dentists. It’s just as important to plan for your family’s finances. Here are some of the steps you should be taking at different ages and stages to set your child up for financial success:
WHEN YOU ARE PREGNANT
WHEN YOUR CHILD IS BORN
You need a will, Power of Attorney, and medical directive. Your will appoints a guardian for your child if something happens, and creates a trust when you die, to hold your assets for your child until they are an adult. You should also look at life insurance to protect your family. Term insurance is around $30/month for a million- dollar policy; remember that stay-at-home parents needs coverage!
Open a 529 account. If you are a Maryland resident, the state-run plan is highly rated and you can receive a state tax deduction for contributions. You can start with as little as $25 a month. If you make less than $175,000 as a married couple, you may qualify for a state match as well.
WHEN YOUR CHILD IS EIGHT
Open a Roth IRA. There are many advantages to having a Roth IRA but the biggest at this age is instilling the habit of saving a portion of your income. WHEN YOUR CHILD IS FOURTEEN
Open a youth savings account and debit card. Our children are digital natives (and who has cash to give them an allowance anyway?) and need to learn to manage electronic money. Teach them the four things you can do with money: save, spend, give, and invest.
AT EVERY AGE
Model wise money habits. Frame spending as choices we make (we can eat out or put that money towards a big vacation). If you give to charity, include them (gifts of time, talent, and treasure all count). Take them grocery shopping and show them unit prices. Explain how insurance works when you go to the doctor or pharmacy. If they need a check for school, have them write out the check for you to sign.
CovingtonAlsina is a Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.
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