With the current economic situation in the country, it’s no surprise that so many parents fear for their children’s future. After all, pensioners are now better off than the average worker, more people than ever before are borrowing from ‘the bank of mum and dad,’ and there is every chance that the current generation of children will be worse off than their parents.
Simply put, it’s a huge concern. But there are some things you can put in place to ensure your child has a sound financial start to life and set them up for a more positive adult life. In today’s guide, I’m going to go through a few things you might want to consider – let’s take a closer look.
Teach them about finances
Regardless of how much money you have spare to put away in savings for the future, the best thing you can do for your child is to ensure they are financially literate. Your kids won’t learn any of this vital life skill in school, so their ability to balance the books and understand the benefits if saving is all down to you. It can be tricky to teach kids about the basics of money, but it is a significant step for them to get to grips with, and the earlier you start, the better.
Make use of Trust Funds
If you have a child born between September 1st, 2002 and January 2nd, 2011, they will already have a Trust Fund set up in their name, and it’s a great starting point for any savings that you might be able to add. Parents can contribute up to £4080 every year, tax-free, and your child will be able to access their savings when they reach the age of 18. Obviously, if things are tight for your finances, it’s a lot of money to consider saving – but the more you put away, the better.
Junior ISAs are the financial tool that replaced the Child Trust Fund, and they work in a similar way. So, if your child was born after January 2nd, 2011, it’s the best option to kickstart a savings plan.
Contemplate your life
Another big thing you can do for your kids is to ensure that they aren’t left with any significant legal fees if you pass away. Make sure you have a will in place, which explicitly lays out your financial wishes for your child. According to About The Funeral, it’s also a good idea to put aside some money into a funeral plan which should cover the costs of a ceremony. Given the average funeral costs several thousand pounds, it’s not something you want your children to have to deal with.
Create a university fund
Going to college is incredibly expensive right now – and tuition fees are expected to rise even further. If you want your kids to enjoy a university education and avoid building up enormous debts before they start working, it is advisable to put aside some money in a savings pot. Of course, it’s going to be tough when you are short of spare finances, but anything you manage to put aside will help your kids.
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