Introduction
As mothers, we want to ensure that our children’s futures are set up for success. Speaking for myself, I’ve struggled financially as an adult because my parents didn’t set me up for success financially. My parents provided for me and loved me, yes, they did everything to ensure me, and my siblings didn’t want for anything, but they were not in the position to secure us financially because they were not taught. My goal is to change the trajectory of money management in our communities and culture and break those bad generational money habits and ensure that my legacy is protected and preserved; and if you want the same keep reading. If you’re looking for one answer that fits all, you won’t find it here. The term “best” is defined differently for everyone, but I will share with you 3 features to look for in a financial asset to determine if it is the best long-term savings for your child (ren).
- Flexibility
As mothers, life can be life-ing and sometimes we just don’t have enough money to spend that we once had. One minute, the money is flowing in, and the next it’s a little dried up. But no matter our money or financial situation, that shouldn’t stop us from saving or investing into our children’s future, so we should have a long term savings plan that has unlimited flexibility, including the time frame (ie: being able to make contribution changes 10, 15, 20+ years from now).
Flexible in terms of you are not bound to sticking to how you start the savings plan. Throughout the time, you should be able to change contribution amounts, beneficiary designations etc without having to create a new financial vehicle. If your plan or a chosen company or insurance/bank institution is not able to meet you where you are with strict guidelines, then you should look elsewhere. Be sure to ask this question before moving forward with opening any savings account or insurance policy.
- Compound Interest
Compound interest is interest accumulated from a principal sum/or money you saved “use of the $350 a month example” and previously accumulated interest/interest you earn along the way. In other words, stacking up interest as you save and the more you save, the more compound interest. Let’s say $350 a month contributed with an annual total of $4200, in 5 years if you continue with the same contribution of $4200 yearly, your account value is now $26,000 when you only contributed $21,000 over 5 years-the difference of $5,000 is the compound interest.
If your money is not growing when you contribute to the savings plan, it’s a waste. There’s no point to contribute $20,000 over 5 years for example, just to still have $20,000, that is not beneficial for you and your child (ren) in a long-term savings plan. In order to know what your potential interest and dollar amount can potentially be over a certain period of time, I encourage you to schedule a call with a financial professional (such as myself).
- Change in Ownership
The purpose of setting up our children financially is to start them off, some parents may not want to continue to do so once a child turns a certain age such as 18 or 21 years old for example. So having the ability to choose a long-term savings plan where you can change ownership to your child (ren) of an appropriate legal age if you choose to enable them to become responsible in their financial planning. An insurance company or bank institution should allow you to change ownership of accounts and/or plans once a child is legal age. If you don’t want to keep ownership of the savings account after you feel you have done your part and are not allowed to change ownership, then you should look elsewhere. Be sure to ask this question before moving forward with opening any savings account or insurance policy.
Let’s Engage
Which feature is most important to you and your family’s financial plan? Why?
Conclusion:
Let us pray: Lord thank you for bringing this amazing mother on this blog post. I pray that she receives the clarity and abundance she is seeking in her finances and that of her family. She is the one that will break bad generational money curses and will lend and not borrow. In Jesus name, Amen!
Contact Information That May Interest You
I would love to continue our conversation. If you’re up to it, I invite you to chat with me further and let’s talk about what’s important to you with your family financial planning.
Booking link: https://calendly.com/speakgenwealth/45min
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My name is “Kim”berly Jones, a financial coach for mothers who specializes in indexed universal life, term life insurance, and annuities. Learn more about my brand’s mission, vision, and values at: www.speakgenwealth.com
