Invest in Your Family’s Future Today

Invest in Your Family’s Future Today

During my interview with Paul Pilzer he said something I’ll never forget…

Something that will change the way I think about how I spend my money forever.

He said, “The sharing economy is really where we used to just buy things. We want to get rich. Why? We want to make money. Why? To get a bigger house. To get another car.

“All the things we wanted to think we’d buy.

“Today what’s changed is… we not only want to buy them, but we want to share them when we buy them.

“We recognize that the greatest house in the world is an empty tomb if you’re alone in it.”

He couldn’t be more right. The greatest fulfillment in life comes from that which we do for others.

That’s why people donate to charities, volunteer at soup kitchens and do things like the ALS Ice Bucket Challenge.

That’s why people invest in their children’s and grandchildren’s futures. In fact, when we hear from readers looking to make extra cash — a lot of times it is to do just that.

To be able to share their wealth to help secure their family’s future.

Today, I want to cover what I’ve learned about saving for your child’s or grandchild’s future.

Please note: There are a ton of options when it comes to saving for the future. Before picking any one plan, it’s always a good idea to meet with a financial professional that can help you set up what’s right to reach your personal savings goals.

With that out of the way, let’s jump into what I learned…

#1. Create a 529 College Savings or Prepaid Tuition Plan

You have two types of 529 plans.

The first is a general college savings plan. It gives parents the opportunity to set money aside for their children’s schooling. It can be used at any school, which includes private K–12.

Some states even give you a tax deduction when you contribute to the state’s 529 plan. And when you make a withdrawal for education expenses that are qualified, those expenses are exempt from federal income tax.

Your second choice is a prepaid tuition plan. It locks in current tuition rates for public institutions. With regularly rising prices in education, this is a great way to protect yourself.

Keep in mind, both 529 options can vary slightly by state. Be sure to check out your state’s 529 plans before making a final decision on what would be right for you.

#2. Start a Custodial Account

This is an account that you can use if you want to save money for your children but don’t want them to have access to it until they’re adults. You simply deposit money in your child’s name.

You manage the account.

A custodial account may be set up at a bank or brokerage firm. This type of account is run by the Uniform Transfers to Minors Act and the Uniform Gifts to Minors Act. With this type of account children can even own their own securities and other assets.

#3. Open a Children’s Savings Account

Many credit unions and banks offer this type of account, which can be co-owned by the parents. This is a great account to help your child learn the importance of saving their money, rather than spending it all on things that they don’t need.

You can set up recurring transfers so that children can take an active role in helping manage the account. With some institutions you can even earn interest or receive dividend payments.

Keep an eye out…

Be sure to look for our emails Monday–Friday at 2:00 p.m. EST to keep receiving these tricks of the trade.

With Purpose,

Dr. Patrick Gentempo

Patrick Gentempo