Money milestones parents should plan for their kids

Raising a child can be expensive: You could spend around $300,000 before it's time for them to leave the nest. Whether you're planning for kids, currently expecting or are already a parent, Ally Financial highlights how knowing and planning for their key financial milestones can set you both up for success.

Introducing an allowance

The first purchase a kid makes with their own money is a big deal. Even when they're small, giving your kid the ability to make their own financial decisions can be a way to develop independence and identity. Creating early money memories can give your child a head start on understanding financial concepts like saving and spending.

This could also be a good time to open their first bank account. They likely wouldn't be able to open an account on their own until they turn 18, but you may want to look into opening a custodial savings account.

Landing their first job

Your child's first job will add a hefty dose of responsibility — not only at work but also in their wallet. Help them navigate this stage by reviewing key financial skills like budgeting and saving. Now might also be a good time to talk about more adult expenses like income tax.

Cruising toward independence

Remember the feeling of freedom when you got your first set of car keys? Help your child with this significant milestone by planning together:

• Talk with your child to develop a savings plan and budget for everything that comes with car ownership (maintenance, gas, etc.).
• Explore the pros and cons of buying a used car, as well as a new one.
• Decide if you will buy yourself a new car and hand down your old one to your child. If so, be sure to check up on your credit score.
• Discuss whether it's more appropriate to lease or purchase a new vehicle.
• Explain how to mindfully select car insurance and determine if you'll be adding them to a family policy.

No matter which road you take, working with your child toward this big purchase can help build their financial confidence for other money milestones ahead.

Heading for higher education

A degree from a four-year university isn't for everyone, but make sure to talk to your child about their plans. If you've been saving for college for them, now might be the time to let them know where things stand. Talk to them about which college expenses they will be responsible for and don't forget to discuss student loans, financial aid, scholarships and other programs that could help cover costs.

Saving for the first apartment

Before you know it, your kid will be planning to move out of the house. As you and your child navigate this money coming-of-age together, it's a great time to:

• Discuss when they plan to move.
• Look together at their paycheck and expenses to develop their first budget and savings plan.
• Consider what expenses you'll continue to help with (phone bill, streaming services, etc.).

Think back to your first few months after moving out and the kind of questions you had. Your child may need help searching for an affordable apartment, stocking their pantry or saving up for a sofa. Making sure they're well prepared can help them avoid any high-dollar spending once they're out of the nest.

Having important conversations

As your child moves into young adulthood, you can still give guidance on life's big money moments. When they reach milestones like working a full-time job or getting married, you can start conversations about how to save for retirement, get health insurance or make a down payment on a home.

A life of financial independence

Starting to save early, having candid conversations about money, being prepared for financial milestones and explaining your own money decisions can give your child the ability to face the future with confidence.

This story was produced by Ally Financial and reviewed and distributed by Stacker.