What to consider when starting out with your child’s finances
When a child enters your life, your life changes step by step. You grow into the role of mom, learning new things every day that weren’t part of your daily routine before. When my first daughter was born, I felt totally helpless at the beginning. A baby like that is so cute, of course, but how does it all work? Does it break when I lift my bottom up to change a diaper? What does the crying mean? How much does it need to sleep? Do I have to talk to him? Does he even hear me and see me? What do I do if he doesn’t stop crying? You are given a child, but no instruction manual. Your child and you learn new things every day, the days pass by like hours, and when you next look at the calendar, six months have passed. Once the initial excitement after the birth has subsided and you have settled into your new role as mom and dad, you slowly find your way back into life and can now take care of all the questions that have been left unanswered over the last few weeks. There are still the many envelopes with money from the birth to help with the child’s finances. You don’t really have time to deal with them now… You might think that it’s better to put money into your savings account quickly and take care of your child’s finances when you have more time. Stop! As a mom of two, I can set you straight. Don’t put it off until there’s “more time” because there definitely won’t be. My recommendation is to take care of your child’s finances before it goes to childcare. It’s not difficult and doesn’t take long. Don’t let your excuses about it not working out right now stop you, but make a clear decision to take care of your child’s finances! 
Which 3 points are essential for your child’s finances?
You have the clear intention of giving your children the best financial foundations so that they can lead an independent life. You want to allow your children to go abroad if they want to, to get to know real life, other people, other cultures, and other lifestyles. I remember the first big trip I took outside Europe. That was over 20 years ago and I flew to New York on my own. What a thrill that was for me! That was a time when there was no mobile internet. Can you imagine those times? I went to cafés to check emails and write. I then arrived alone at JFK airport and met two women at immigration, with whom I took a cab to Manhattan. I looked out of the window in amazement and was totally blown away by the world I was immersed in. For me, who originally came from a small town, it was totally crazy. And do you know why I could afford it? Because my mom had saved a bit of money. At least there was enough for the flights. The accommodation was a completely different matter and totally adventurous. In order to give your children financial freedom, it’s really important that you pay attention to these 3 points.
1st must-have for your child’s finances
There used to be savings accounts where you deposited money for your children. You held a real book in your hand where all the credit was entered using a printer. I remember clearly that at the beginning of my training, I operated in credit and was always amazed at what was printed in the books. As there is hardly any interest in daily accounts at the moment, you have a wide choice of accounts that you can use. Today, I recommend that you open a modern electronic savings account. You can easily open one online. You can, for example, set up a current account, into which you then pay everything you received for the birth of your child. With this account, you have a great basis for being able to react flexibly to your children’s wishes at any time. At some point, in addition to the day-to-day necessities of life, you will have to face other, higher expenses. I didn’t want to get my driver’s license until quite late, at 19. I was really glad that my mom had set up a savings account from which I could simply take the money. I think a driver’s license cost around DM 1,500 back then. This corresponds to EUR 750 today. My mom did not put any money into the second must-have.[/norebro_text]
2nd must-have for your child’s finances
Having money available at short notice is really important but at the same time, I recommend that you start elsewhere. In the former, you currently get almost no interest. In the long term, this is not a good basis because your money will become less and less due to the inflation rate. So what can you do to invest money for your children? I recommend that you open a custody account and invest money regularly, which will earn you a good interest rate. If you start immediately after birth, you can give your child an almost 6-figure sum by the age of 18 with a savings contribution of EUR 200. And that is with a current annual interest rate of just 6%.[/norebro_text] If you can’t afford it right now, ask the people around you for support. For example, your parents, grandparents or friends.
3rd must-have for your child’s finances
The first two must-haves were about investing your children’s money. This is extremely important but, at the same time, you can also keep an eye on other topics. Namely, what happens when certain crises occur in the lives of you and your children? These can be accidents that have health consequences for your child, or something similar. When I was about 10 years old, I went to the orthodontist and he prescribed braces. I found that really exciting at first but later, I didn’t feel like wearing them anymore. I remember that I only wore them for 1 week before my next visit to the dentist. It hurt because she always had to adjust them. Today, there is a very high probability that your child will have to wear braces. The costs are rarely covered by statutory health insurance. This can quickly mean that you end up with several thousand euros in costs. I would definitely recommend that you consider taking out supplementary dental insurance for orthodontic services.
CONCLUSION
You are absolutely awesome and I celebrate you as a new mom and dad these past few weeks! You have achieved extraordinary and superhuman things. And I say THANK YOU for that! When your child is born, you are allowed to grow into the role. There is a new challenge every day. Once you’ve settled, you can take care of the many envelopes with money from the birth as a starting aid for your child’s finances. Even if you think, “I don’t have time for that at the moment.” “I’ll do that later”…Stop! As a mom of two, I can assure you that this isn’t the way to go about it! Don’t put it off until there’s more time because there definitely won’t be. My recommendation is to take care of your child’s finances before they go into aftercare. It’s not difficult and doesn’t take long. There are 3 must-haves in children’s finances that you should definitely take care of:
- Park money in a current account whenever you can
- Investing money in a custody account
- Hedge risks
Take care of your child’s finances and implement the individual steps. For a life full of choices for your children.