My wife and I are expecting our first child on Christmas Day 2019.
We’ve spent a lot of time getting ready. We have car seats, strollers, clothing, stuffed animals, basinets, cribs, play pens, baby gates, bottles, sweaters, and a whole lot more.
(There’s probably a lot of stuff we’re forgetting, to be honest.)
But one thing that’s caught our attention is the immaterial stuff you can do for your kids.
Everyone knows that children need to be warm and fed.
But did you know you can help them develop socially, cognitively, and even financially from the moment they’re born?
We didn’t either.
And now that we do, we have to tell everyone else about it, too.
It sounds crazy to say, but it’s true.
If you play your cards right when your child is born, you can turn them into a millionaire by the time they’re 40.
#1. Open a Shared Credit Card (& Pay It Off in Full)
Credit cards are amazing and terrifying.
They’re amazing because you can use them to build your credit score and eventually buy a house with someone else’s money without being trapped in predatory lending processes.
They’re terrifying because they can quickly send you into a vortex of debt and financial pain from which you may never recover.
That’s why it’s so important to use credit cards the right way.
Don’t buy anything you can’t afford. Pay it off in full each month.
When you use it that way, your credit card becomes your future’s best friend.
But what about your kids?
As it turns out, parents can open credit cards in their kids’ names.
This is a scary proposition for anyone who wants to exploit their children.
But for the 99% of parents who want what’s best for their kids, it’s a godsend.
Here’s how it works.
First, open a credit card in your child’s name.
Then, add yourself as a co-user of the card.
Third, use the card every month to pay for things that you can already afford, like gas and groceries.
Fourth, pay off the total balance of your credit card every month before it’s due.
Fifth, don’t use your credit card again until after the due date of your balance.
(For a lot of cards, this means paying your balance on the 26th and not using it again until the 6th.)
Repeat this system for every single month of your child’s life from the month they’re born until the month they turn 18.
By the time they’re legal adults, they’ll have a perfect (or near-perfect) credit score.
They’ll be able to buy their own car with minimal APR, if any at all.
They’ll be able to save for a house knowing that they’ll be pre-approved for a mortgage loan from any provider.
They’ll be miles ahead of their peers in terms of their capabilities in society.
It takes minutes to set yourself up with a credit card in your child’s name.
The results pay off for a lifetime.
#2. Open a Savings Account (& Contribute Regularly)
Did you know savings accounts accrue interest every month?
It’s true, and it’s amazing.
Savings accounts that accrue interest are like the opposite of credit card debt.
Credit card debt becomes a problem when you don’t pay off the principal — the money you spent — and start earning interest — the profit that the credit card company makes.
When your interest starts earning interest, that’s called compound interest, and it’s the #1 reason it’s so freaking hard to pay off a credit card.
But compound interest can work for you as well, and it’s surprisingly easy.
First, go to your bank and open a savings account. It’ll probably take a while because branch bankers are basically required to upsell you to different accounts.
Don’t worry about the upsells. Just go with a standard savings account to start. Ask about the interest rate that the savings account has attached to it. It should be around 2%.
Next, add $100 (or whatever you can add) to the savings account as seed money.
Third, contact your employer(s) and ask them to direct deposit 2%-5% of every paycheck into that savings account.
That can be a lot for someone. If those percentages are too high, then go with $5. Seriously, that’s enough to start your kid’s financial future!
Fourth, don’t touch the savings account and let your pay periods accrue.
You’ll earn 2% interest on the money you have in it every month. You’ll also invest your paycheck’s earnings automatically from direct deposit.
Over the course of the next few decades, that savings account can turn into an incredible investment.
In fact, if you don’t touch it for a few decades, you can turn your child into a millionaire by the time they retire.
(Or hit retirement age. Let’s be real — Millennials and Gen Z will never retire.)
All it takes is a little coordination on your part to get the bank account open and your paychecks segmented properly.
In four decades, you’ll thank yourself — and so will your child!
#3. Socialize Them beyond Your Family
For me — a person who’s perfectly content to sit alone in a dark room with a laptop starting on any given Saturday until the heat death of the universe — this is an especially big challenge.
Fortunately, daycare helps a lot with this. Like, a lot.
Children enrolled in daycare tend to have a stabler emotional sensibility while showing a stronger sense of good behavior as they grow into “middle childhood,” according to a study by EDEN.
So while daycare costs so much that you may be required to sell your furniture, morals, and one or more kidneys, it’s actually more of an investment than it is a cost.
In fact, just one year of daycare can help prevent future tantrums (called “high levels of emotion” by the study), fights (called “peer-related difficulties”), and self-isolation (“low pro-social behaviors”)
Ridiculous scientific jargon aside, daycare apparently provides a lot of benefits for a child that they wouldn’t otherwise get in one-on-one parenting 24/7.
Does that mean this works for every kid?
Every child is different.
But the results of the EDEN study show some pretty strong results for most of the participants.
So daycare may not be guaranteed to make your child into a smooth-talking salesperson who can charm the pants off a Mormon.
But it’ll probably help them be a better person before they can even read.
#4. Limit Screen Time
You know how every Baby Boomer with a child and a memory has constantly screamed at young people for being lazy and getting themselves away from the television and computers and the Internet?
They’re not right. They’re still Andy Rooney levels of obnoxious.
But, as it turns out, screen time can be damaging to a child’s early development.
In a study published by Dr. Adrian F. Ward called Supernormal, researchers found that excessive exposure to screen time (and the Internet) can yield developmental challenges in young children.
Most uncomfortably, those challenges include inhibited gray matter development — meaning excessive screen time can actually change the way your child’s brain develops!
This doesn’t stop as a newborn. The dangers of this can extend all the way up until a person’s brain stops developing physically, which happens around age 21.
To make matters worse, gray matter — especially the gray matter of your frontal cortex — is responsible for emotional empathy.
If someone doesn’t have their frontal cortex, they’re literally incapable of empathy.
They basically become the human embodiment of Twitter.
The real takeaway here is to limit a young child’s screen time because their brain is firing on all cylinders at all times.
Gadgets are awesome. Devices are fun. Spongebob is timeless.
But it can all wait — and kids don’t have to engage with all of it.
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