Parenting is a Journey
An Adventure of Discovery Not Only of our Children But of Ourselves as Well
A new year can be a time to rethink priorities. From getting healthy to making sure your finances are on the right track, the start of a new year can be the impetus for change.
Having a new baby can also get you to rethink your priorities, as any new parent knows.
With fresh starts in mind, here are four resolutions to consider so that your baby grows up to be a smart, and wealthy, investor:
Start a college savings fund — now
College can be an investment in a child’s future. Starting to save for child as soon as a child is born can be one of the best investments a parent will make to help their child.
Don’t wait a month or so after your child is born. Because if you delay it now, you know what will happen next — you’ll continue finding excuses not to do it and eventually your kid will be asking you how they’ll afford to go to college and you won’t have an answer.
A 529 plan is one way to save for college. Legally known as “qualified tuition plans,” they’re available in all 50 states as a pre-tax way to invest money. The other type of 529 plan allows tuition to be paid ahead of time at some colleges.
Whatever amount you invest regularly in a college savings account, it can only help your child possibly avoid borrowing money to pay for college. In 2015, 68 percent of graduates from public and nonprofit colleges had student loan debt, with an average of $30,100 per borrower, according to the Institute for College Access & Success.
Open a savings account for your child
The personal savings rate in the United States has dropped regularly since the 1970s, and is now at 5.7 percent, according to the U.S. Bureau of Economic Analysis. Americans averaged an 8.32 percent personal savings rate from 1959 until 2016.
If you want your child to be a saver, then open a savings account for them as soon as they’re born.
Why would a baby need a savings account? Because you’re likely to get some cash gifts either now or on their birthdays. That money is meant for the child, not for you to spend on a night out, so do the honest thing and put the money away in the child’s savings account when you get it.
Yes, savings accounts pay lousy interest rates now. Even if they do go up soon, it may be more profitable to put the money in a long-term CD or an investment account in the child’s name.
The point is to have some sort of account to put gift money in. If you’re feeling especially kind, contribute to it every month with an automatic deposit from your checking account.
Invest in one stock
For the cost of one share of stock, you can make your child a long-term investor by joining a Dividend Reinvest Plan, also known as DRIPs.
The compounding interest from paid dividends of DRIPs is reinvested to buy additional shares of the stock at little or no cost. You can enroll in a specific stock’s DRIP after buying only one share, and can contribute to it regularly with automatic debits from a checking or savings account.
You don’t have to regularly buy additional shares of stock, but you child will thank you in 20 years if you do.
At the very least, that one share of stock will show your child the value of investing for the long run. Who knows, they may want to someday invest their allowance there and end up investing in other stocks.
Invest in an index fund
If picking one stock for a DRIP is too risky for you, show your child the benefit of cutting investment costs by investing in an index mutual fund that has low expenses.
Since you’re unlikely to beat the market, find a mutual fund that mirrors popular groups of stocks and bonds, such as the S&P 500 index.
Mutual funds charge management fees, ranging from 0.06 percent on a diversified index mutual fund to 1.5 percent or more on an actively managed fund.
Do your child a favor and invest in a fund that has the lowest possible fees — which are usually index funds. Find one that is 1 percent lower than an actively managed fund and you’ll save tens of thousands of dollars over an investing lifetime.
You may not be able to successfully make all of these investing resolutions in the new year for a new baby, but two of them should be no-brainers: opening a savings account for any money given to your child, and starting a college savings fund.
Start the stock market investments if you can afford them, even if it’s only with a few hundred dollars. It will someday show your child how much you care about their financial future, and can be a way for them to learn how to invest on their own.
Aaron Crowe is a freelance journalist in the Bay Area who has a daughter, age 12. She has had a college savings account since the day she was born, and puts at least half of her birthday cash gifts in her savings account. Follow him on Twitter @AaronCrowe or read about his financial struggles at CashSmarter.com.
Trying to close the gender gap in technology, the nonprofit organization Girls Who Code works to give girls a fast track to catching up. The organization has determined that in younger years, girls are interested in computing programs, but a huge drop-off occurs between the ages of 13 and 17. In one of the largest hiring industries, females need a place at the table.
Girls Who Code began in New York and is now in 42 states. Says founder Reshma Saujani, “When girls learn to code, they become change agents in their communities. Whether it’s a game to illustrate the experience of an undocumented immigrant or a website to provide free college prep, our girls create technology that makes the world a better place.”
Today, Girls Who Code alumnae are majoring in computer science at UC Berkeley, Stanford and SF State, in large part because of their involvement with the organization. So how can young girls get involved?
Girls sixth grade and above can join a local group or attend a summer immersion camp if they are a sophomore or junior in high school. A quick look through the website shows summer immersion camps at Pixar in Emeryville; at Adobe, Twitter and Square in San Francisco; and many more. Clubs are available at 118 locations throughout the Bay Area, including at Holy Names High School for Girls, Piedmont High School, American Indian Public High School in Oakland, as well as in pretty much every city in the East Bay, South Bay and north. All you need to do is enter your zip code into the GirlsWhoCode.com website to see the closest options.
Labyrinths dot the Bay Area
Not just a great David Bowie movie: Parents wonder how to instill a sense of the spiritual in their children when every moment seems filled with loud play or screen time. Introducing them to the age-old concept of the labyrinth may be one way to get started. A labyrinth is a spiral walkway that encourages meditation as one follows the twists. It’s suggested that before embarking on a labyrinth, the walker take a few breaths and center herself, then walk with purpose towards the center. The labyrinth’s lesson is just when you think you’re closest to the center, the path veers off ... but you reach your goal if you persevere. Labyrinths date back to the Middle Ages as a walking meditation.
Labyrinths dot the Bay Area. The most famous one is found within the walls of Grace Cathedral in San Francisco (itself worth a visit for its neo-Gothic architecture), but outdoor ones permit you to combine a hiking day or picnic with your labyrinth walk. In Oakland, visit several in the Sibley Volcanic Regional Preserve (the Mazzariello Labyrinth is marked on park maps as “quarry pit”). In El Cerrito, one can be found after a brisk uphill hike at the Hillside Nature Area (trailhead near the recycling center on Schmidt Lane). Near San Francisco’s Ocean Beach, you can find a complex 11-circuit labyrinth by jumping on the Coastal Trail towards the Golden Gate Bridge from the parking lot at Point Lobos (for the USS San Francisco memorial). Go down the steps to the Mile Rock Beach; the labyrinth has spectacular views.
Grace North Church in Berkeley has an indoor labyrinth; on Jan. 27, walk it 6-7 p.m. with 97 candles lighting its path, along with live music from Winding Way, an acoustic world music group. Free. RSVP appreciated, but not required, at http://www.gracenorthchurch.net.
There’s some etiquette to sharing a labyrinth with others; Prevention magazine has a good roundup here: http://www.prevention.com/fitness/fitness-tips/labyrinth-walking.
And then, of course, end your day with a viewing of the Jim Henson film Labyrinth, because David Bowie’s hair and evil goblin pirate get-up may inspire their own reverent form of meditation.
Erika Mailman is a Northern California freelance writer. Reach her at Erikaeditor@cs.com.