Many first-time parents do not realize the expenses associated with raising children and preparing for their future. In addition to the diapers, car seats and strollers, there are expenses for day care, private school and college tuition – and they can put a big dent in a family’s budget.
If you weren’t born with the name “Rockefeller,” don’t worry. The most important things are to realize how much you can afford to invest and save and how soon you can begin doing so. The sooner you begin the less money you will have to save each month and the more interest you will earn.
Many parents are currently saving for their children’s college education but the problem is the amount and the investment vehicle used. Savings accounts are a safe, sure way of saving money, but they earn less than the rate of inflation and earnings are taxed annually, based on the parents’ income. And because of their easy access, they provide temptation for the saver.