Northwestern Mutual: Ways Parents Can Plan for Their Children’s Future

For parents, planning for their child's future is about laying the groundwork for success, happiness, and security. Here are several ways parents can help provide a stable financial path for their children.

College can be a significant expense, but parents can prepare early using the right tools. "One option is a dedicated education savings plan, like a 529 plan or Coverdell Education Savings Account," said Rebecca Bast, founder and private wealth advisor at Northwestern Mutual's Bast Financial Group. These plans offer tax advantages to help save for college efficiently.

Equipping children with financial management skills can help them navigate future financial decisions. Teaching financial responsibility includes lessons on saving, budgeting, and understanding the value of money. Involving children in age-appropriate financial decisions can foster early financial literacy.

Parents might also look into life insurance policies to provide financial security for their children’s future. The right life insurance plan can ensure necessary support in the event of a parent's untimely passing.

With numerous planning aspects, seeking out a financial advisor can provide personalized guidance tailored to family needs and goals. Finding a financial advisor can be done online or through recommendations from family, friends, or coworkers.

Encouraging children to earn and save their own money promotes independence and a strong work ethic. Allowances, part-time jobs, or entrepreneurial ventures can teach the value of hard work and financial independence.

An estate plan ensures a child's care and parent's assets are managed according to their wishes. "An estate plan can include a will or trust, guardian designations, and care instructions," said Bast. Keeping these documents updated is crucial for alignment with life's changes.

Parents should periodically reassess their financial plans and goals to adapt to their children's growth and evolving circumstances. Regular reviews, potentially with a financial advisor, help to effectively plan for and support their children's futures.