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Published: Oct 16, 2020 6 min read
Jade Schulz for Money

If seeing Baby Yoda in The Mandalorian makes you want your own Child, beware — there's a financial dark side.

Kids are expensive. According to the United States Department of Agriculture’s most recent Expenditures on Children by Families report, middle-class married couples spend nearly $234,000 on food, shelter and other necessities in the first 17 years of a child’s life. That's American dollars, not Imperial credits, and it's enough to make any self-respecting member of the Republic wonder how to plan ahead.

Enough Star Wars jokes. Seriously, should you start saving for kids before you actually have kids?

According to Trina Patel, a financial advice manager working with Albert, the answer is yes.

“It’s such an important question that’s often overlooked until people are in that place and feel ready,” Patel says. “Then they’re like, ‘Oh. Wait. I haven’t financially been ready.’”

Your exact game plan depends on your timeline. If you're in a position to have children soon, you probably want to come at this differently than if you're single and it’s a far-off prospect. If you're preparing to conceive or adopt, you probably want to think about it differently than if you're considering freezing your eggs.

All of those things have distinct price tags attached, but it’s not a bad idea to start thinking now about how you can change your lifestyle to shore up savings.

“The earlier you can do it, it’ll feel like you have more options later in life,” Patel says.

Patel says to do some research, figure out how much money you'd like to save and then make a plan for how to reach your goal. If you have a couple years before you’ll need the cash, you may want to invest the money using a capital preservation strategy that’s not too high-risk. If you're looking to have kids sooner rather than later, you might want to set up a high-yield savings account and earn interest.

She adds to make sure your money is growing with inflation and not losing its purchasing power sitting somewhere. This is another place where beginning early is beneficial: Time can help even out fluctuations in the market. (Like the ones we’re seeing tank interest rates at online banks right now.)

You can also take advantage of custodial accounts set specifically designed for people to save for kids. One option is the Coverdell education savings account, which is set up to pay for a beneficiary’s qualified school expenses at the elementary, secondary and higher education levels. There are also accounts under the Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA), which let adults hold assets like stocks and bonds on a minor’s behalf until they turn a certain age.

But perhaps the most popular option is a 529 plan.

College is a colossal expense: According to the National Center for Education Statistics, tuition, room and board at a public college costs nearly $18,000 a year. 529s can help with that burden, says Ksenia Yudina, founder and CEO of college savings app UNest. They grow tax-free over time if used to cover qualified expenses associated with a child’s education — think tuition, textbooks and laptops.

Yudina says one cool thing about 529s is that you can actually set one up for your kids before they’re born. You can make the account in your name and then change the beneficiary once they have a Social Security number.

(Side note: This path could be risky if you either don't end up with kids or they don't end up pursuing higher education. If you use 529 funds for non-qualified expenses, you'll owe tax and a penalty. One way around this is by changing the 529 beneficiary to a relative who needs the money for school... or yourself if you choose to continue your education.)

Another perk is that other people can contribute to 529 plans. Grandparents and friends can give money that way instead of wasting it on random gift cards.

“It’s very simple if you do it the right way and use the right platform,” Yudina says. “Even [a] small investment, if you make it consistently and allocate the savings on autopilot, over time it can make a huge difference.”

The bottom line? You can, and maybe should, start putting away money for your kids — even if actually having them feels lightyears away.

You can use a high-yield savings account, investment account, custodial account or 529 plan to do so. Patel says you shouldn’t do this in place of taking care of your own future plans and retirement accounts, but it’s smart for young people to get the ball rolling.

“They don't need to wait to start saving for existing kids or future kids,” Yudina adds. “Build the financial cushion.”

More from Money:

Everything to Know About Saving Money for College, According to Experts

The Pros and Cons of 529s vs. UTMA Accounts

Best Savings Accounts for 2020