One of the biggest financial challenges for parents is how to provide for their children and train them to be self-sufficient adults. Parents want to meet their family's basic needs, but beyond that, they also worry about sound education for their children. Most parents want to go further and help them settle into adulthood by offering help with initial set-up of their homes and other requirements for starting life. Some actually would want to secure full financial comfort for life, for their children. These are loving thoughts and desires that are much in order, but sometimes quite a challenge to fund. Unfortunately, many parents run into much difficulty with providing adequately, even when it could otherwise be possible. One way of averting this problem is to start early and not wait for the burden to mount: more children, multiple school fees, other needs of a fast-growing family, etc. It could all be overwhelming, if you bungle it. To help you start early and maintain disciple - an important ingredient for success - you should consider the benefit of a child' savings account for each child, starting from birth.
A Child Account for Planned Provision
A child savings account is an account opened for a child in his or her name, preferably at birth and initially operated by the parent until the permitted age for self-operation. The purpose is to provide for various expected needs of the child, through different stages of life, into adulthood. It is clearly a forward-looking, proactive approach, so you wouldl wonder why every child will not have that from their parents. If they did, the banks would be full of child savings accounts and possibly raise all their funding from it. The reality, though, is that, as important as that measure could be, not enough parents have the wisdom or foresight to put it to work. While an argument about lack of money will sound louder, the part of ignorance and lack of will in all of it may just be weightier. Unfortunately, while governments elsewhere are establishing such funds by law to provide for their next generations, it is clear that such programmes will hardly be our fortune in countries like Nigeria. Obviouly not in this era when the welfare and luxurious comfort of politicians is still top of the agenda. So, parent, wake up: the buck stops with you. Make your work easier and more effective using tools that can give you flexibility and consistency. Here are benefits you will derive from opening an account early for each of your children:
Capture All Inflows From Onset
It's our culture to show joy and support when a child is borne and much of this translates to monetary donations from friends, relatives, colleagues, etc, when a child is borne. Yes, you'd prefer to keep those inflows for the child, but because the money is with you, it becomes a handy bail-out each time you have an urgent need. The truth is that in the end, you keep nothing for the child. Why not take advantage of a child savings account, especially one that will limit your access to withdrawals? After all, the most pressing need is the well-being and future development of this child. A early savings account helps you get all the money out of reach and possibly locked up for his/her benefit.
Earn Returns for Growth
A savings account is an interest-bearing account and runs on compound interest basis. That's great for a child when started early, because you not only sterilize this money from easy misapplication but you also give it room to enjoy compounding and grow. Over time, that growth could build a sizeable fund that can help shape the child's progress.
Regular Incremental Savings
It's natural that if you create an account for your child and place some money in it, you will derive some excitement as you see the money grow. That is a good incentive for more additions to the account. Besides, a disciplined parent can commit to regular incremental additions to the account. And each time gifts are made to the child, they are quickly rushed into the account. Before you know it, you could be up with a growing fund that can help meet the child's educational and other needs. That is, irrespective of the parent's financial standing.
Give a Powerful Head-start
Understanding money is a strong foundation for life, but it doesn't just come and not everybody gets it. Learning to save through a bank is one early exposure that can easily shape a child into financial prudence and success. When you begin an early account for your child, he not only grows soon to know about it, but can also see how it has grown over time. He could begin to also personally deposit any money that comes his way. A good financial manager is already being molded.
Enjoy Funding Flexibility
Above all, you can build up a reserve for each child's up-bringing in a fairly painless manner by spreading it over a wider period of consistent saving. Simply task yourself, according to available resources, to put a minimum sum into each child's account every month and gradually provide for their education and other needs. If the amount in the account gets sizeable, it will also be possible to spread some into other investments assets like stocks. Chances are high that you are able to meet the child's needs and have something to hand over as he/she is ushered into adulthood.
So, that's one tool you can use. Financial success is not so much about having limitless money as it is about prudent and wise use of what you have. It's also very much about being able to order your finances in such a way that you meet your defined financial needs, irrespective of your income status. A child savings account proviides a planned basis for funding a child's education and development.
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