Financial Challenges of Raising Children

Financial writer Catherine Alford offers tips to save for your child's future.
1:52 | 10/21/15

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Transcript for Financial Challenges of Raising Children
Time for "Gma's" "Real money" and this morning we look at the financial challenge of raising children. It can be daunting. Hundreds of thousands of dollars so Rebecca Jarvis searched for new ways to save and long up a secure future for your kids. Reporter: Pete adorable Charlie, the 3-month-old has her whole future ahead of her. The challenge for mom Sharon and dad Craig how to pay for her future. You want better for your kids than you had. Reporter: Babies come with considerable price tags. According to government studies, the average cost of raising a child to age 18 is $250,000. Fortunately to help baby Charlie's parents we knew just who to call. Katherine Alford. A financial writer and mother of 18-month-old twins who specializes in family finance. Hi, guys. How are you today? Reporter: Step one says Katherine, start an education fund. Beyond a 529 plan, Katherine likes to advise couples to invest in a mutual fund in a child's name. The Bennett of that is they can use that money for anything so if they want to go on a trip or study abroad, they can do that. Reporter: Step two, don't splurge on luxuries like too many baby gadgets or annual over the top birthday parties. Get used to the idea of minimalism. There is so much pressure to have the most amazing birthday parties. Reporter: Step number three, consider investing in a rental property. The key is to buy a home with a 15-year mortgage. So by the timer they're 18 and going to college, the mortgage is totally paid for and it just becomes a cash generating property. Reporter: Real estate can come with downsides. Notes Katherine, but it's a risk she says that can prove worthwhile for a baby's future. For "Good morning America," Rebecca Jarvis, ABC news, new York. Thanks, Rebecca. A lot of good tips there and

This transcript has been automatically generated and may not be 100% accurate.

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