Here are a financial advisor’s 4 most important money tips for parents with young kids

Parents with young kids or those expecting a child may wonder: What financial steps should I take to set my family up for success?

Here are four of the top considerations, according to Rianka Dorsainvil, a certified financial planner and co-CEO of 2050 Wealth Partners. Dorsainvil is also a member of CNBC’s Advisor Council.

There are tax-advantaged ways to save for your child’s future education.

Among the most popular is the 529 plan, which allows parents to invest money for higher education and other costs. The investment grows tax-free, and withdrawals are also tax-free if used for “qualified” expenses.

Qualified costs include enrollment at a college or university, books, computers, and room and board,, among others. They also include up to $10,000 a year of tuition at a private K-12 school, and up to $10,000 on student loan repayments during one’s lifetime.

One big benefit, Dorsainvil said: Parents can easily change the account beneficiary later if their kid decides not to attend college. That new beneficiary can come from a host of family members. Parents can also withdraw the funds for other purposes, but would owe income tax and a 10% tax penalty on the investment earnings.

While each state has its own 529 plan, parents can invest in a plan outside of their state. Parents might miss out on a state tax break by doing so, but the most important factor when picking a plan is the investment quality, Dorsainvil said.

For example, parents should generally avoid funds with consistent negative returns and with an annual fee (known as an “expense ratio”) exceeding 0.5%, she said.

Parents also shouldn’t save for a child’s education at the expense of their own financial wellbeing, Dorsainvil said.

“There’s no loan for retirement,” she said. “So while it’s super important for our clients to save for our children’s education, we want to make sure they’re…