Saving For Your Child’s Future

Saving for your child’s future is a crucial priority for families, and one we work hard to support. From Sparky’s Kids Club to our Club Ignite program for teens, FFCCU offers many of the tools to suit your family savings needs. Guest blogger, Nichole Coyle, CFP® CSLP®, details 8 key steps in preparing your child for financial stability and success.

As a financial planner, one of the most frequent conversations I have with parents centers around saving for their child’s future. It’s a question loaded with emotion, responsibility, and often a bit of uncertainty. But here’s the thing: securing your child’s financial future doesn’t have to feel like you’re trying to solve a 1,000-piece puzzle without the picture on the box. With the right strategy and steps, it’s more like putting together a series of small, manageable pieces that come together for a complete picture.

Here’s a step-by-step guide to help you start saving for your child’s future:

1. Start with a Solid Foundation: Build Your Own Financial Health

Before you start saving for your child’s future, it’s crucial to ensure that your own finances are in order. You’ve probably heard the classic airplane analogy: put your oxygen mask on first before assisting others. The same principle applies here.

Review the following with your planner:

• Is your emergency fund sufficient?
• Are you managing your cash flow well?
• Is your debt manageable?
• Are you saving enough for your own retirement?

Securing your financial well-being is the best gift you can give your child because it means they won’t have to worry about supporting you later on. A financially secure parent is in a better position to help their children build wealth.

2. Saving for Your Child’s Future through Financial Literacy

You wouldn’t wait until your child is 18 to teach them how to ride a bike, so why wait that long to teach them about money? Financial literacy is a life skill that should be taught early and often. Start with the basics when they’re young—how money works, the importance of saving, and the difference between needs and wants.

As they grow, you can move on to more complex topics, like budgeting, investing, and managing credit. The goal is to give them the knowledge and confidence to make smart financial decisions on their own. A crucial part of saving for your child’s future is involving and empowering them.

3. Build an Education Fund

One of the biggest expenses parents face is paying for their children’s education. Whether you’re planning for private school tuition, college, or even grad school, it’s important to start early and save consistently.

Consider opening a 529 savings plan, which allows you to grow your money tax-free as long as it’s used for educational expenses. Some states even offer tax deductions or credits for contributions to these plans. Another option may even be a Roth IRA for those who might be looking to blend educational savings with future retirement flexibility.

The earlier you start, the better, as the magic of compound interest can work in your favor over time.

4. Create a Trust or Will

One often-overlooked part of preparing for your child’s financial future is estate planning. Creating a will or a trust allows you to decide how your assets will be distributed in the event of your passing. This ensures that your children (or their guardians) will have the resources they need to grow up financially secure.

A trust can also provide flexibility and control over how and when your children receive the money, protecting them from financial mismanagement if they are too young or inexperienced to handle a large sum. It’s a powerful tool, and consulting with a financial planner and estate attorney can help you structure it to meet your specific goals.

5. Life Insurance Can Protect Your Plans for Saving for Your Child’s Future

As much as we’d prefer not to think about worst-case scenarios, life insurance is a critical part of protecting your family. Life insurance ensures that, in the event of your death, your family can continue to meet their financial needs.

Term life insurance is often a good choice for parents because it’s affordable and provides coverage during the years when your children are financially dependent on you. The payout from a life insurance policy can cover everything from day-to-day living expenses to college tuition, so it’s worth seriously considering.

6. Encourage Saving and Investing

Once your child starts earning money—whether through allowance, babysitting, or a part-time job—encourage them to save and invest a portion of it. Open a custodial Roth IRA or a custodial brokerage account for them. These accounts allow them to start investing early, giving them a significant advantage in growing wealth over time.

Imagine your child graduating college not only debt-free but with a small investment portfolio already working for them. That’s the kind of head start many people wish they had.

7. Saving for Your Child’s Future Means Leading by Example

Children are more likely to adopt good financial habits when they see their parents practicing them. Show them how you budget, discuss your financial goals, and explain the steps you’re taking to achieve them. This transparency helps demystify money and teaches them that managing finances is a lifelong skill, not something you do once and forget about.

If you make investing and saving a part of your daily life, your kids are more likely to follow suit.

8. Have Conversations about Financial Values

Beyond the nuts and bolts of financial planning, it’s important to pass along your values around money. Teach them the importance of giving, whether it’s to charity, their community, or helping a family member in need. Encourage them to think about the kind of life they want to live and how financial decisions can support that life.

Is financial independence important to them? Do they want to prioritize experiences over material possessions? These are conversations that can help shape their relationship with money in positive ways.

Saving for your child’s future isn’t about hitting some magical number or filling an account with an arbitrary sum of money. It’s about laying the groundwork for them to make smart, informed decisions, giving them the tools they need to manage whatever comes their way.

By focusing on your own financial health, teaching them financial literacy, saving for their education, and protecting them with life insurance and estate planning, you’re not just preparing them for the future—you’re setting them up for a lifetime of financial success.

The best part? You don’t have to do it alone. As a financial planner, I’m here to guide you every step of the way, helping you make decisions on how best to start saving for your children’s future.

Looking for help on where to start? Schedule a consultation today, and let’s build your child’s financial future together.

Nichole Coyle, CFP®, CSLP®

Managing Partner, Financial Planner

2300 St. Clair Ave NE

Cleveland, OH 44114

216.621.4644 x1607 office

330.607.2213 cell

nichole@impactcfp.com

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Cetera is not affiliated with the financial institution where investment services are offered or any other named entity.

Investments are: Not FDIC/NCUSIF insured * May lose value * Not financial institution guaranteed * Not a deposit * Not insured by a federal government agency.

All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.

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Posted In: Guest Blog, Saving, Sparky's Kids Club