I think the title explains itself but for those of you that have kids or thinking of expanding your family read my blog below to start building generational wealth ASAP!
529 College Savings Plan
As a parent, you can start contributing toward your child(ren)’s 529 college savings plan soona s they are born. What is a 529 college savings plan? It is a tax-advantaged investment plan available in the United States and designed to help save for future higher education expenses of a designated beneficiary. This kind of account is known as a great tax savings because they inherently grow tax-free, withdrawals are tax-free, and most states allow you to deduct your contribution from your taxable income.
High-Interest Saving Account for an Emergency Fund
This is a great option especially for those who are skeptical of option one above. Open a high-interest savings account with your child, and set aside a certain amount each month toward it. A quick google search on High Interest Savings Account should get you started. They change often so always be on the look out who has the best deal at the time.
Roth IRA
So before you start opening a Roth IRA note that your child can’t open an actual Roth IRA until they start working and filing a tax return. There’s a few ways to accomplish this if you want to get started early. First, you could hire them yourself if you own your own business, even if it’s a part-time.
As always, make sure you consult a tax professional for these types of decisions.
Taxable Brokerage Account
This might be worth waiting until your child is a little older to show them the power of a more aggressive investment style. Show your child how to use stop orders and limit orders to trigger purchases and sales. If you earn a hefty return on a particularly good investment, you could let them withdraw part of it to celebrate.
Credit Cards
Add your child to your credit card as an authorized user to help start building their credit early. Make sure that you are paying the full balance off each month to maintain great credit for your child(ren) or maybe wait until you are in a better financial situation to make this move.