Start Investing in your Childs Future
Managing our money in a responsible way is such an important part of our lives but, its often not implemented in the way we live our lives. We tend to use impulse spending instead of budgeting and displaying smart spending habits. Our community is now experiencing an increase in debt and poor credit ratings. This issue is affecting young grads and young adults just entering the workforce. With credit being introduced so early with little education on how to effectively use credit and protect your credit rating, we are seeing an influx of young adults entering into debt very early. Clearly this is due to students graduating school with the hope of that dream job, but when faced with reality they find out that it's not as easy as they thought and your loan payments become due within a couple months after graduating. A lot of students also acquire a heavy load of credit, with high interest credit cards and end up in a very unfortunate situation before they even had a chance to start to experience their adult lives. The younger generation needs to be educated on finances and how to set properly set themselves up in life. Its better to instill these values sooner then later to ensure that your children are well prepared for their future. Parents please start to think about your child's education as soon possible. Investing in an RESP (Registered Education Savings Plan) is very beneficial and worthwhile. There has been a lot of misconception on the product, but to break it down; its basically a savings plan with an extra incentive of units that value an amount which is based on the investment pool (all subscriber contributions) on the year that your child graduates. Your child will not only get your saved contributions, but also additional disbursements and government grants after the 1st year of studies. I've worked with an RESP company and I have seen the clients really benefit from being able to cash out tuition for their children and receiving a great payout of interest and grants for your child's education. Parents if you can help your kids get ahead by avoiding student loans, you will be putting your child ahead of the game. The key to these plans is to only contribute what you know you can afford. These plans usually give you the option of monthly, yearly or quarterly contributions and the minimum for monthly contributions is $9.90, which is very affordable. Don't get over ambitious and try to contribute more then your income allows. That's when you risk the chance of losing money because you have to stop or you fall behind on your payments. You definitely need to keep in mind the possibility of job loss or some drastic change in your finances, with any long term investment be very realistic with your affordability. If you don't feel comfortable with starting an RESP, then simply use a savings account to save small amounts on a monthly basis for your child's education. It may seem minimal at the time but, think about it depositing $50/month for 18 years is $10,800, if you start when your child is one year old. That will be a big help. There are a lot of key things to keep an eye on when trying to be smart with money but, the biggest misconception is relying on credit.The credit card companies entice their subscribers with Air miles and points but, the amount of interest that THEY are maximizing on is not worth it. I have a lot to say about money budgeting, credit, investing and so forth but stay tuned for more great tips on money management.
