There’s no way to fully insulate a child from the risks of the world. However, by planning ahead, you can do everything within your power to set your child up for a lifetime of health, wealth, and success. The little decisions you make today could have a major impact on the next 15, 25, or 50 years of their life. Here are a few recommended action steps:
- Take Out Life Insurance
It doesn’t matter if you’re lower class, middle class, or upper class, life insurance plays a vital role in protecting your family’s future by providing a guaranteed sum of money in the unfortunate instance that something happens to you or a loved one. As you plan ahead for your child’s future, there are a couple of policies to consider:
- Term life insurance on yourself. A simple 20-year term life insurance policy on each parent is a good first step. As long as you’re in decent health, these policies can be purchased relatively inexpensively. The typical rule of thumb is to get a policy that’s equal to or greater than 10X your income. In other words, if you make $100,000 per year, you’ll want a $1 million policy.
- Whole life insurance on the child. In addition to insuring yourself, look into taking out a whole life policy on your child. A whole life policy actually accumulates value over time. You typically spend the first 10 or 15 years paying into the policy and then no more premium payments are required. After this point, the insurance policy has both a cash value and a death benefit (both of which gradually increase). By starting when your child is young, you give them the best chance of building value.
The sooner you take out life insurance, the less expensive it’ll be. By working with an insurance broker, you can shop around and find the best possible rates for your needs and budget.
- Draft a Will
Setting up a life insurance policy on yourself and naming your child the beneficiary is a good start, but you’ll also want to draft up a will. Your will is basically a legal document that explains how you want your affairs to be handled after you pass away. It outlines how your property is distributed, who is in charge of the process, and who your child’s guardian will be until they reach the legal age to make their own decisions.
- Put Money Into a 529 Plan
The rising cost of a college education is something you have to plan ahead for. And though there’s no telling how much a college degree will cost in 10, 15, or 18 years, one thing is for certain: It’ll be expensive. The best way to plan for these expenses is to begin putting money into a 529 college savings plan.
A 529 plan gives you a tax-advantaged way to save and invest funds for a college education. And as is the case with any investment opportunity, the sooner you invest, the more opportunity you have to benefit from the power of compounding interest.
- Try Tooth Banking
Are you familiar with the concept of tooth banking? It’s basically the process of storing dental stem cells that have the ability to regenerate into other cell types in the future. And though it’s a relatively unknown process, it’s something that you can do today to safeguard your child’s future health.
Tooth banking is best done when your child is losing their baby teeth and/or having wisdom teeth removed. When properly extracted and stored in a tooth bank, you can give your child a better chance of fighting future diseases and illnesses.
- Encourage Inquisitive learning
The traditional approach to education and schooling in North America is to put your child in a classroom with dozens of other kids and have them go through the curriculum that’s assigned by your public school district. This typically includes courses in math, science, history, and creative arts. And while there isn’t anything wrong with this approach, per se, there could be a better way to set your child up for success.
One of the best approaches is an inquisitive learning format where you let your small child show you what they’re interested in. Then based on this interest, you can encourage a unique curriculum that addresses their biggest wants, needs, and desires. We call this an inquisitive learning approach.
Give Your Child a Head Start
There will come a time when your child will reach an age where they have to begin making important decisions for themself. And while you won’t always have a say in what they do, you can empower them to make wise choices in the future by giving them a head start today. Whether it’s finances, health, or education, small seeds planted today can mature into flourishing plants that yield fruit for many years to come. Your job is to be a planter – nothing more and nothing less!