Children are our future. But, honestly, children also cost: from diapers and baby food, the first mobile phone to college and a driver's license. The Federal Statistical Office has calculated that a child costs a total of 130,000 euros by the age of 18. If you want to start your child's financial life on the right foot, you should start saving money for your children early – better today than tomorrow. That's why the birth of a child is an ideal time to think about their financial future. The best start to a carefree future you can give your children is one that has a solid financial foundation.
For example: if you save money every month from his birth, you can realize a big dream for your son or daughter on their 18th birthday, as shown by a simple calculation: assuming you save 50 euros per month for the children, the child will have about 10,000 euros accumulated by their 18th birthday, and that without any interest. And because of inflation (which averages 1-3% annually, even more realistically at 4-5%), the money in a non-interest-bearing savings account becomes less valuable over the years – so modern wealth accumulation and savings must go a smarter way. I don't mean the classic savings books and accounts because banks no longer offer any interest on them. Long gone are the days when banks gave 6-8% interest (sometimes even more) on such savings. The reality is that nowadays you get 0% interest in this way, and if you subtract inflation averaging 1-3%, this method leads to the destruction of money.
Continuously setting money aside also has an important educational effect on children. Namely, by saving money wisely, you set a good example for your children on how to have a healthy relationship with money and how to keep it – to achieve more later in life. Likewise, people who live beyond their means and are highly indebted and in loans – indirectly send their children a message that such behavior is normal. And we all know that children typically do not what we tell them, but what we show them every day.
In addition to good financial stability, good health security, which increases your child's chances for a carefree life, is also very important. So in addition to financial security, care about the child's health is important. In case of illness, there is a risk of incapacity for schooling, incapacity for work, or in the case of care needs, preventive health protection is crucial.
But what is the best way to save and how to protect your child's health?
FINANCIAL SECURITY
When deciding on the right financial protection strategy for your child, different aspects play an important role. What is the optimal term, what degree of flexibility is needed, and with what risk are you willing to invest money?
Even with smaller monthly payments, you can create a very good financial foundation for your child's future. The earlier you start, the more funds your child will have later, thanks to the well-known “interest on interest” effect. In this way, your descendants can later have a significant initial capital for staying abroad, a driver's license, or their first apartment. Often that is precisely what we did not have in our beginnings in Germany.
HEALTH SECURITY
Regarding health care, you will always want the best possible treatment for your child. Therefore, it makes sense to invest in appropriate protection. This way, you can cover additional treatment costs. For example, for dental or orthodontic services (e.g., braces), visual aids (e.g., glasses), or a private hospital room for you and your child.
Accidents or serious illnesses can cause permanent health damage to your child and have a significant impact on their future. Then the financial burdens on the family are very large. Child disability insurance in this case protects your child from the financial consequences of school incapacity, work incapacity, and care needs.
From 01. 01.2021, parents receive 15 euros more child allowance per month for each child. Use this child allowance as money for the future of your child. Children have big plans in life, and your child should have quality health and financial security in all life situations.
If you have more questions, need the right concept, or simply want to save for your child – feel free to contact my team or me. We will be happy to build a healthier foundation for the future of your children together.”
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