The struggle of being a parent is real. When you hold your kid for the first time in your arms, it becomes everything for you. Whatever you do after that, there will always be your baby in the picture. However, kids are pricey. They would have you burn the midnight oil to get everything they need. Their future and education mean something for you and you want to secure it.
There are ways that can make the finances a non-issue for you. We are here with some tips that can help you sock away some cash for your beloved kids:
More money saved means more money in the future. However, when you are planning savings for your kid’s college, it would have a deadline and you’ll need money by the time your kid starts going to college. Various financial advisors recommend a 529 fund for such expenses.
In 529 account, your money grows tax-free until you withdraw it and use it for educational expenses. It is better to start contributing as early as possible. Kids can also make a contribution to their own money.
Do not rely on just 529:
Only one account may not be enough for educational plans. You should look into other plans as well such as Uniform Transfers or Uniform Gift to Minors-Act. These accounts provide more assistance to parents. In both these accounts, the hold of these money retaining account is handed over to your kid and he/she reaches a certain age.
Keep your accounts separate:
The accounts you use regularly should be separate from other savings accounts you like to set up. There are categories of saving accounts and many suggest high-yield savings account at an FDIC-insured bank. You can also give a nickname to this fund such as ‘My boy’s or girl’s fund’. You can get a really good rate on this account.
Kids, sometimes, get gifts from family members like they cover your tuition fees. However, there are rules for these gifts too. A gift up to the amount $14,000 a year without incurring a gift tax can make your child ineligible for aid on their free application for federal student aid. Financial experts suggest to hold off the funds and give the money when the kid graduates as a gift, particularly if they want to use the aid.
Get a lawsuit loan:
When you are relying on a lawsuit for some cash, make sure you don’t lose your current balance in order to cover the legal expenses. Yes, you may get a handsome amount of money from a company or entity who became the reason of something bad that happened to you. But, time will be required for the trial to end and you cannot get the money before that. With a shortage of money, you cannot have your lawyer get the best possible amount against your lawsuit. Don’t compromise your child’s money to cover some legal expenses when you can get a loan against your lawsuit.
Where to get a loan on your lawsuit? You don’t have to go to the bank for this loan. There are funding companies that deal with early cash settlements. The funding company you choose would examine your case and assess the amount you should be expecting. You would fill out a form to apply for the loan and this is free. Your lawyer would submit the required paperwork. Don’t get the help of loan brokers as they charge higher fees.