Parenthood is an adventure filled with joy, chaos, and countless decisions. As your little one grows, the early years are a golden opportunity to set the stage for a bright future. Before your child blows out five candles on their birthday cake, here are 10 savvy things every parent should do to give their child a head start on life—and save some money along the way.
1. Start a College Fund (Even If It’s Small)
It’s never too early to plan for the future. Opening a 529 college savings plan allows you to invest in your child’s education while enjoying tax advantages. Start with whatever you can afford—small, consistent contributions add up over time. Bonus: Friends and family can contribute to it for birthdays and holidays.
2. Build Their Financial Foundation with a Custodial Account
A custodial account, like a UGMA or UTMA, lets you save and invest on your child’s behalf. The money can be used for anything from school supplies to their first car when they’re older. By starting early, you give those funds time to grow.
3. Teach Basic Money Skills (Yes, Even Now)
Your toddler may not be ready for compound interest lessons, but they can learn basic concepts like saving and spending. Use a piggy bank to teach them the joy of saving pennies for something special. These early lessons lay the groundwork for a lifetime of smart money habits.
4. Create a Budget-Friendly Activity Routine
It’s easy to overspend on toddler classes and toys, but many enriching activities cost little to nothing. Check out free local storytimes, community events, and DIY crafts at home. Building a routine around these low-cost activities can save money while creating lasting memories.
5. Secure Life Insurance (For Peace of Mind)
No one likes to think about worst-case scenarios, but securing life insurance ensures your family’s financial future is protected. Term life insurance is often affordable and provides coverage during your child’s formative years.
6. Start a Memory Box or Journal
Time flies, and keeping a memory box or journal lets you capture the little moments that mean so much. Include milestones, their artwork, and funny quotes. Not only is it a beautiful keepsake, but it’s also an inexpensive way to preserve family history.
7. Invest in Their Health Early
Schedule regular checkups and keep up with vaccinations, but also focus on building healthy habits. Teach them to love veggies, embrace exercise, and get plenty of sleep. Early investments in health can pay off in fewer doctor visits (and bills) later.
8. Take Advantage of Free Educational Resources
The preschool years are crucial for cognitive development. Many libraries, museums, and online platforms offer free educational tools for young learners. Programs like PBS Kids, Khan Academy Kids, and even your local library’s digital offerings can provide hours of learning for free.
9. Create a Family Emergency Fund
Kids are unpredictable, and so are life’s surprises. An emergency fund can cover unexpected expenses like urgent daycare, medical bills, or car repairs. Aim to save three to six months’ worth of essential expenses and build it slowly if needed.
10. Start Traditions They’ll Cherish Forever
The best gifts don’t cost a dime—traditions like Friday family movie nights, Saturday pancake breakfasts, or a special birthday ritual create emotional security and joyful memories. These are the moments your child will treasure long after the toys are forgotten.
Final Thoughts
Parenting is filled with financial decisions, but it’s the love, time, and intentional choices that make the biggest difference. By tackling these 10 steps before your child turns five, you’re setting them up for a future filled with possibilities—and keeping your family’s finances on track.