It’s that time of year again, where we gather all of our important documents to file our annual taxes before the upcoming deadline. Many may decide to splurge with their refunds, while others decide to make wiser choices with their money. What will you decide? Before you make that call, if you have children, you may want to check out these savvy uses for your tax money.
Start A College Fund. More likely than not, your child will continue their education after high school. Whether it’s college or trade school, the cost of going to school is expensive. Sure, there are options such as taking out a school loan or lending against the equity of your home. But, if at all possible, you don’t want to go into debt for school.
Use your tax refund to open a college fund for your child. There are many options such as a 529 Plan or a Coverdell Education Savings Account. Both options allow you to withdraw from the account once your child needs it for school, tax free.
*Set up an appointment with a financial planner to discuss which options are best for you.
Create Your Own Day Care Escrow. If you are one of many who has to pay out weekly for child care or after-school care, you may want to open a designated account to allocate money for this bill. Calculate your monthly cost and put away designated amounts — three, six, or nine months for example — to help lighten the burden of this strenuous cost.
Open a Savings Account With Your Child. It is very important to teach your child how to be responsible with their money. One of our fondest memories as children was the day our parents took us to the bank to open our very own account. We learned the basics of money. Which is to save, spend, and give some away to charity. To this day, this is the primary reason why we are good stewards over our money.
Take a trip down to your local bank. Sit down with a banker and discuss which account would be the best to open for your child. Most minor accounts are free and don’t require any extra steps such as direct deposit to waive a monthly fee. Don’t forget to bring your child along. It can be a great learning experience for you both.
Set Up a Will. Regardless of how much in assets that you have, a will should be established. A will leaves your loved ones with specific instructions on how you want your estate handled. Your will is where you will designate a guardian and instructions on how you want your minor children to be taken care of in the event you are no longer able to care for them.
*Seek the advice of an attorney to set up a proper will.
Invest in Music Lessons. Studies have found that a child who plays a musical instrument can enhance their learning abilities. If you notice your children showing interest in music and instruments don’t ignore it. If your child can’t participate in learning an instrument at their school, look for one-on-one lessons with an outside instructor.
Our children are the future. If we take the time out now to invest in them, they will make a difference in this world. Before you know it, they will be leaving the house for college to start their own lives and make their own paths. Aren’t your children worth your tax dollars?
Tai and Tarin Perry, the Double Saving Divas, are financially savvy identical twin sisters, and investment bankers turned money saving experts. You can also connect with them on their Twitter, Facebook, and YouTube Channel.
And join us and the Double Saving Divas this Friday at 3pm ET for a Facebook chat, where we’ll be answering all of your money questions. Click here to tune in.