The saying goes, “the more money you save when you are younger, the more money you will have when you are older.” For many people in life, saving is never on the top of the list of things to do similar to laundry or the honey to do list. Growing up in small town U.S.A. and joining the Marine Corps out of high school, I was fortunate to have a large family with an array of experiences…highs, lows, and even some failures. I was encouraged and mentored growing up that before I ever thought about finding the one or getting married to Melanie, Owner of Stars and Stripes Doulas. As many couples look to start a family, it is recommended to have a set amount put aside to ensure a good financial foundational base. Hindsight being 20/20, I will always be indebted to my extended family for educating me how to save young and often. Teaching your new baby as they grow older in life how to save will allow them to appreciate having a good financial base and making them believe there is a money tree. You’re planting a seed to a money tree just by opening an account. As you cultivate it and give it attention, this ‘tree’ will continue to grow much like a money tree. But unless you give it attention and add to it, it will not continue to grow.
Providing your newborn baby with a good financial foundation base will requirement commitment like many things in life. After you leave the hospital with your new bundle of joy; the next chapter begins. Many times after the birth of a child a loved one, family, or friends may decide to open a savings bond on behalf of the baby. While there is no textbook definition of how much to save or not to save, it is important to do something early. The sooner you decide to open up a mutual fund or 529 saving plan for your new baby, the likelihood of teaching them about money at a younger age will increase. We all spend money on frivolous things throughout life from time to time. Even if you are able to save $25 dollars a month for the first year your newborn baby would have an estimated $311.50 based on a three percent return. While this maybe not a lot, as your child grows older you can explain to them how saving money young and often can be beneficial for them as they watch their compounded interest, dividends, and money grow.
Investing in a mutual fund bond can provide regular income from interest paid by the bonds to illustrate how saving at a young age can be rewarding. While there are many different types of mutual funds from bonds, to growth, growth and income, or even balanced funds. Bonds are relatively safe and can help investors ride out stock market downturns if you are concerned about losing money that you invested for your baby. However, every month, bonds provide interest paid back into your baby’s account and quarterly dividends illustrate to your child as it grows older in life just how compound interest and saving money at a young can potentially provide a good foundational base that any parent wishes for their kid.
The cost of having a baby can be so overwhelming that additional savings is just unaffordable. After you take into account the cost of baby clothes, food, diapers, and all those technological gadgets from a baby monitor to iPhone/Android applications the cost can be too much for any new parent. That being said, with proper planning having that financial base will provide that cushion to help offset for the cost of having a child.
As hindsight is 20/20 of many things one may do from getting married to bringing a child into this global world; you are likely reading this article because you follow Stars and Stripes Doulas and have already been provided amazing services both professionally and personally. You may have even gained a friend or three. The moral of the story is saving money for your newborn child is something that should be budgeted for and planned even before your baby is born. The amount is up to you and what you can afford monthly for the future of your baby. The more money you save for your baby at a younger age, the more money they are likely to save over the years.
Written by: Kurt Binversie
Kurt Binversie is the spouse of owner, Melanie Binversie. He is an active-duty Marine with over 18 years of service. He is currently the Marine Corps Tactical Imagery Analysis Course Chief and holds a Master of Science and Technology degree from the National Intelligence University, as well as, a Bachelor of Science in Intelligence from the National Defense Intelligence College. Binversie is currently an Adjunct Professor with American Military University. The Binversies are the proud parents of three children and enjoy traveling, baseball, Nascar, and sharing their knowledge of financial management and savings to improve and increase the wealth of friends, loved ones, and colleagues.