Kids. They don’t stay young forever. Sure they’re all cute and squishy faced for a few months or so. But then walking happens. And after walking, they learn how to talk. What a wonderful life this would be if they used these combined abilities to bring their long suffering mums cups of tea and ask how our days have been. But no. They walk towards sweets and they ask you to buy them. Sometimes it’s toys. Sometimes it’s a melt down in the middle of the supermarket because you refuse to buy them a toilet brush that they’ve inexplicably just fallen head over heels in ‘want’ with. The fact is that bringing bundles of joy into the world is expensive – and the first time they ask you for a car can be a real hardship if you’re not prepared. Trust me. Here’s how you could start saving now to help relieve some of the bank-balance-strain that teenagers and cars can dump on you from a great height.
ISA (Junior ISAs)
What’s an ISA? Are they hard to set up? Isn’t this going to be one more thing that I have to take control of, and I’ll probably get fed up and forget about it soon? Relax. ISAs aren’t complicated. In fact, if your child was born between 1 September 2002 and 2 January 2011, the government would have automatically opened a Child Trust Fund (CTF) in your child’s name – you probably know this, you’d have received a letter in the post at the time. This means that any child coming to car-ownership age these days will already have a CTF set up and ready to go, but you need to switch it to a junior ISA. Why? Simply because when your child reaches 18, the CTF ends. By switching to a junior ISA from Wealthify, you not only stand to benefit from competitive interest rates, but the tax-free savings will continue past their 18th birthday (the junior ISA will switch to an adult ISA automatically). You’ll be surprised how much you could save with regular monthly payments over the years.
Piggy bank interest rates – be the banker
What does any child wish to save for? A computer console or tablet, maybe? A bike, perhaps? Virtual Reality headsets and drones are probably up there, too. Whatever it is that your child wishes for most in this world, the overall chance of them being able to save the cash on their own and make the purchase within even so much as one year of setting savings aside is slim. The highly desirable techno gadgets that the youth of today want to have in their hands throughout their daily waking hours are just too expensive for pocket money and birthday money to afford. So here’s a tip. Set a goal of £20 or £50, and tell your child that when they reach this number in their piggy bank, you’ll double it. This sneakily halves your contributions towards a car while also creating a positive attitude towards saving in your child.
Working nine til five – what a way to buy those wheels
Your darling teenager needs to realise that money doesn’t grow on trees. Once upon a time I had a friend who worked part time in a gift shop and only earned £4 per hour working one eight hour shift per weekend. This was barely enough to pay for a driving lesson each week, let alone allow for the finer things in life that all teenagers require – namely clothes and nights out. But it helped. The deal was that any money earned towards driving lessons would be reimbursed by the bank of mum and dad towards savings for a car. Now, we’re not talking thousands here. 25 lessons at £25 each comes to … drum roll please as I mentally work this out … £625 towards a car. Not that much? You say? Bear in mind that teenagers need rubbish cars. Anything under a thousand pounds is fine. They’ll learn a lot from an old banger, and the insurance premiums are kept down, too!