Start Early to Help Build Your Child’s Financial Security

By John Ingrisano, CLU1

“I want my children to have a good start in life.” Don’t we all? No, that doesn’t mean spoiling them rotten, though we often wish we could. We want to give them a solid leg up so they can achieve their own financial security.

Fortunately, there is much you can do to help bring that about and to help assure that your children, whether still in a high chair or already in high school, can enjoy a lifetime of financial security.

  1. Start young to help them understand the concept of money and how it works. When my daughter was four years old, she’d help me pick out toll money when traveling by car. When we’d go shopping, I’d casually explain why I bought one brand versus another. “By getting this one, we can now afford to go out to lunch with the money we saved.”
  2. Help them cultivate the savings habit by establishing a savings account at your bank or credit union. Set it up in their name and encourage them to make regular deposits. One way is to match their deposits. Let’s say your ten year old son saves $5 a week and you match each deposit dollar for dollar, so a total of $10 goes into the account each week, or $520 a year. When he’s ready to buy his first car in a few years, the down payment, if not the whole amount, will be waiting for him.
  3. Teach them how to spend money. That also means letting them make mistakes. When I was a kid, I blew a whole dollar on penny candy, one hundred pieces. It sounded like a good decision at the time, until the ice cream truck came down the street that evening and I had no money. No, I didn’t get ice cream that day, though my parents did explain how I could have had some candy and some ice cream if I had chosen more wisely. The point: Take a proactive approach to educating your children about money and how to use it wisely.
  4. Set up a college fund This link will open an external site in a new browser window. and help them save money for college. If you care about your children and want them to have the best possible opportunity for a financially secure future, make sure they have the opportunity to get at least a four-year college education. Every bit of research done on the subject shows that there is a direct correlation between education and income.

As I explained to my children: “Your education is your inheritance. There may or may not be money for you when I die, but don?t stand around waiting for it. However, by providing you with an education, I am giving you the tools you need to earn your own wealth. That is the greatest gift of all.”

How Do You Set Up a College Fund?
Start with a Coverdell Education Savings Account (formerly Education IRA). Under today’s laws, anybody (you, a grandparent, favorite uncle, etc.) can contribute up to $2,000 total every year into a Coverdell Education Savings Account. Another option is a Section 529 Plan. Depending on where you live, you can set aside many thousands of dollars to help assure that your children’s educations are paid for.

Both Coverdell Education Savings Accounts and Section 529 Plans3 offer a number of potential benefits. Talk to your financial professional, such as your NYLIFE Securities Registered Representative, for the fine-print details.

An investor should consider the investment objectives, risks, charges, and expenses associated with a 529 municipal fund security before investing. The issuer’s disclosure statement contains this and other information about the investment options and their underlying investments respectively. Please read the Disclosure Statement carefully before investing or sending money.

More ideas for helping your children achieve financial security:

  • Begin their retirement IRA now. This may sound silly at first — setting up a retirement IRA for your ten-year-old — but it’s never too early to start. If they earn an income, your children can begin making IRA contributions at any time. (Or, like many parents, you can make the contribution in their name, provided they have verifiable income.)Let’s say your 15-year-old earns $500 this year doing part-time work. Contributing $500 of your own money into his or her IRA may be a good investment in your child’s future. This gets the ball rolling. Eventually, your child makes his or her own contributions. Then imagine 50 years from now: Depending on the average return, he or she could potentially be a millionaire several times over. And it all started this year because you helped set up that IRA.
  • Update your life insurance program. As long as your children are minors, they are dependent on you for their financial security. If you die prematurely, all your dreams for them could be jeopardized. That’s why you should make sure your life insurance program reflects not only your own needs and current income, but your goals and dreams for your children. How much is enough? That’s your call. The best bet is to get good information. Discuss your needs — both current and future — with your agent. And don’t put it off. Some things are too important to delay.
  • Start their life insurance program by purchasing coverage on children as early as possible. Their rates will never be lower. Many will allow them to increase their coverage at certain key times in their life — such as when they turn 21, marry, graduate from college, or have children of their own. In this way, you are helping carry on the legacy by helping your children protect their children.

The bottom line: If you love your children, hugs and kisses are one way to show it. Another way, one that will stay with them and prove itself day after day for the rest of their lives, is to help them build their own financially secure future.

1 John R. Ingrisano is an author and educator. He has been writing about money management and wealth building for more than 25 years.
2 U.S. Census Bureau (updated 8/7/2001) at
3 Section 529 Plans can only be offered by properly licensed registered representatives of NYLIFE Securities Inc.

2 Responses to “Start Early to Help Build Your Child’s Financial Security”
  1. Music-Band says:


    I was surfing the web and i saw this site, pretty cool.
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  2. Scott says:

    I agree completely with you. One thing you did not mention is the power of using whole life insurance as a savings plan. Life insurance offers tax free accumulation, loans, and passes to heirs tax free. A great plan is the children’s plan at

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