When you become a parent, you start thinking and worrying about things that would never have crossed your mind before. To be honest, you get a little bit paranoid. This is all part of getting used to your new role in life. You didn’t have anyone to care for other than yourself, and suddenly there’s a little human that demands all of your attention.
You’ll do anything to keep your kids safe as they grow up, but this can manifest itself in different ways. As an example, you need to ensure your family is financially protected for the rest of your life. This means you don’t have to worry about money problems or be put in situations where you need to take out a short-term loan, etc. So, here are three financial moves you should make for your family’s sake:
Create an emergency fund
An emergency fund is a savings account that generates interest over time. Its purpose is simple; it remains untouched until necessary. When an emergency strikes, you dip into the fund to cover any costs.
For instance, imagine there’s a natural disaster that causes extensive water damage to your home. Insurance won’t cover the repairs, leaving you with lots of money to spend. Having an emergency fund allows you to pay for repairs without worrying about slipping into debt or getting a loan.
Therefore, you’re always financially recovered when something springs up out of the blue.
Set up a savings account for your kids
It’s a good idea to give your kids something to use when they come of age. As soon as your child is born, open a separate savings account for them. Over the next 18 years, you make regular deposits and generate interest. When they turn 18 and go to college, you give them access to the account.
Now, they have money to cover things like books, educational resources, rent, etc. It won’t be an unlimited supply of money, but you’re setting them up with something. Make sure you educate them on how to look after money so they make the most of it.
Store some cash in your house
Alongside your emergency fund, you should have a second supply of emergency money. This time, it’s kept in cash, in your house.
Why? Because you never know when you might need it. What if your bank accounts get hacked and you can’t access your money? What if there’s a problem with your bank and you’re frozen out for a few days? Having a couple of thousand dollars in cash will keep you ticking over in these emergency scenarios.
Just be sure you store it as securely as possible – somewhere nobody can access it but you. Think about getting something like a Browning safe online that sits in your house and guards the money for years. Even if a disaster strikes your home, the emergency cash will be unharmed inside a safe.
Mainly, you’re making financial moves that provide cover in case of emergencies. A proper emergency fund is highly useful for major emergencies that cost a lot of money. Emergency cash is there as a last resort when you can’t access your bank accounts. Alongside this, it’s crucial to set your kids up with some money when they become adults, so they aren’t constantly struggling and worrying about how to pay for things while at college.