7 Financial Moves to Make Before Your Kid Turns 5
Life gets busy, especially with a kid under 5.
You go from sleepless nights to messy mealtimes to curious toddlers to, suddenly, tiny humans who talk and have (very strong) opinions. Then, before you know it, they’re in school.
At this point, you definitely know how expensive kids are — we don’t have to tell you that. But we wanted to check in: How are you feeling financially? As your kid gets older, you’ll face even more expenses (e.g. school activities, clothes, food, etc., etc.).
Before you get too overwhelmed, make these seven smart money moves before your kid turns 5. Heck, you can do many of these by the end of today!
1. Secure Up to $1 Million in Life Insurance; Rates Start at Just $5/Month
Have you thought about how your family would manage without your income after you’re gone? Chances are your checking account balance won’t last forever.
Now’s a good time to start planning for the future by securing a life insurance policy.
You’re probably thinking: I don’t have the time or money for that. But your application shouldn’t take more than about five minutes — and you could leave your family $1 million with a company called Bestow.
Rates start at just $5 a month, and you can change or cancel your plan at any time. Plus, the security of knowing your family is taken care of is priceless.
If you’re under the age of 54 and want to get a fast life insurance quote without a medical exam, pushy sales calls or even getting up from the couch, get a free quote from Bestow.
2. Get Free Gift Cards When You Load up on Groceries and Diapers
As your kid gets older, you’ll probably notice your grocery bill go up and up. They’re growing fast and need the fuel. Plus you’ve got to plan for their school lunches — every parents favorite chore, right?
What do you usually do with your receipts? You check out, they hand you a mile-long piece of paper, and you frantically stuff it to the bottom of a grocery bag. Pretty worthless.
But a free app called Fetch Rewards will turn your grocery receipts into gift cards. It partners with tons of brands to give you points for every grocery receipt you share. Then you can exchange the points for gift cards to places like Amazon, Walmart, Chipotle and dozens of other retailers.
And it’s perfect for those of us who don’t want to put a ton of work into this. All you have to do is send Fetch a photo of your receipt, and it does everything for you. No scanning barcodes or searching for offers — and you can use it with any grocery receipt.
When you download the app, use the code PENNY to automatically earn a free bonus you scan your first receipt — you’ll be well on your way to your first gift card.
So next time you’re packing lunch for your kid, think about all the things you can buy with an Amazon gift card.
3. Invest 15 Cents in The Stock Market
Yeah, we know what you’re thinking: 15 cents? How’s that going to do my kid any good?
Well, that leftover change from your morning coffee and evening grocery hauls could turn into more than $1,000.
That’s what happened when Penny Hoarder reader Jeremy Kolodziej opened an investment account with Acorns. The app’s round-up feature bumps each of your purchases up to the nearest dollar and puts the spare change into the stock market, which helped him mindlessly save $1,076 in about 20 months.
“It’s a virtual coin jar,” he says. “You don’t even think about it.” He used the spare change to pay for two vacations.
Plus, Acorns invested the money for him, allowing him to grow his savings — without studying stock prices or managing trades.
It’s never too early to get kids started too. Explain what you’re doing and how their money will grow with them. Eventually, they can take more ownership of the process, and when they’re old enough, they’ll have a nice little savings to put toward something of their own.
The app is $1 a month for balances under $1 million, and you’ll get a $5 bonus when you sign up.
4. Make Sure You Have the Right Car Insurance Policy
Your life changes when you become a parent. Suddenly, most of your old needs and worries seem so small. You’ve got a child now, and the most important thing in your world is making sure they’re safe. Plenty of people start shopping for cars with better safety ratings, but you should also take another look at your auto insurance.
This is a smart time to shop around and do some comparing to make sure you have all the protection you need. A free website called The Zebra will do the shopping for you in just two minutes.
Just enter basic information about your car and driving history, and it will compare prices and policies from more than 100 companies to find you the best price.
The Zebra says it saves its users up to $670 a year. What’s better than that, though, is peace of mind.
If you find a policy you like, you can sign up online instantly.
5. Check in With Your Budget
At this point, you know how expensive it is to raise a kid. Yes, it’s totally worth it (ahem, most of the time), but it’s important to keep tabs on your budget, especially because, as your kid grows, your expenses likely will, too. (Think: After-school activities, clothes and sports)
Keep tabs on these new expenses as they pop up so you can keep your budget updated accordingly. And if you don’t already have a budget? We like the 50/20/30 budgeting method. It’s super simple.
Here’s how you’ll allot your income:
- 50% goes toward essentials — yup, that’s your kid stuff.
- 20% goes toward financial goals — think: that emergency fund.
- 30% goes toward personal spending — this is basically your catch-all category.
6. Let This Company Pay Off Your Credit Card Debt
It’s common to rack up a lot of debt in those first few years of parenthood, so how do you keep it from snowballing? We found a company that will pay your credit card bill this month. No, like… the whole bill.
Your credit card is getting rich by ripping you off with insane rates, but a company called Fiona could help you pay them off tomorrow (if the total is under $100,000).
Here’s how it works: Fiona will match you with a low-interest loan you can use to pay off every credit card balance you have. The benefit? You’re left with just one bill to pay every month, and because the interest rate is so much lower, you can get out of debt so much faster. Plus, no credit card payment this month.
Take, for example, Katherine, who faced $12,000 in credit-card debt. Holding her back? The 15.24% interest rate. By refinancing with a 5%-interest, seven-year personal loan, she saved $12,000 in interest.
If she’d kept on the same road, she would have paid something like $14,000 in interest alone over 25 years. Yikes.
Fiona won’t make you stand in line or call a bank. And if you’re worried you won’t qualify, it’s free to check online. It takes just two minutes, and it could save you thousands of dollars. Totally worth it.
7. Consider Quitting Your Job
As a parent, your list of expenses never seems to end. But there’s a great way for busy parents to earning up to $60 an hour working remotely — and on their own time.
Those are the perks of working as a bookkeeper, says Ben Robinson, a certified public accountant and business owner who teaches others to become virtual bookkeepers through his online course, Bookkeeper Business Launch.
And no, you don’t have to have a CPA to be successful in this business. In fact, all you really need are decent computer skills and a passion for helping business owners tackle real-world problems.
It’s a great opportunity for moms who want to work part-time, millennials who are just out of college and anyone who wants to bring in real money while working from home.
Robinson shares what it takes to be a virtual bookkeeper, plus tips for making this career work for you in a free class which you can sign up for here.
Carson Kohler ([email protected]) is a staff writer at The Penny Hoarder.