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Financial Matters for Parents
How to Start Planning for Your Child's Future
By Jean H. Manrique
However, Marc Freedman, a certified financial planner in Peabody, Mass., says "some mutual fund companies have designed 'trust funds' which may meet your needs at a much lesser cost."
Brette Sember of Clarence, N.Y., uses a combination of methods to save for her children. "They both have savings accounts, government bonds and investment accounts," says Sember. "The savings accounts were opened when they were babies, the bonds were gifts at birth and the investments were set up by their grandparents after birth." Holiday and birthday money is deposited into the savings accounts, but the investments have been left to grow on their own.
Sember has also chosen a combination of ways to register the accounts. "The savings accounts are registered jointly with [me or my husband], one of the investments for our daughter is joint with one of us and the others are in our names only," she says. "Our financial advisor suggested putting the latest investments in our names only so that we would have control of the money even after the kids are 18."
Sember agrees with Gore that it is important to think about college far in advance. "If you wait until the child is a teen it's almost impossible to save enough," she says.
But Nohr says not to beat yourself up if you haven't saved. Parents are often stretching just to fund the regular expenses of raising children. "Today, kids cost $106,000 to raise," Nohr says. "That's a lot of money!"
Your best bet, according to Nohr, is to get the advice of a trustworthy and knowledgeable financial planner who can show you how best to grow Baby's money. Even if you start small, as did Gore both for himself and his children, with the right strategies you can make your baby's financial future a lot brighter.
