Thinking about how to give your child a solid financial foundation is important. The years soon fly by and, before you know it, they are 18 and ready to start their adult life. At that stage, they need money to pay for driving lessons and, probably, further education.
Neither of which is cheap. So, you really need to be saving for those eventualities now, while they are still young. If you do not, then the chances are you will not be able to help them out much. With this in mind, I’ve done a bit of research and identified 3 effective ways for you to save for your child’s future.
Open a Junior ISA for each of your children
You could simply get a junior ISA from Wealthify, which has a really good reputation or you could shop around for an alternative. These savings accounts are specifically designed to ensure that when your child reaches 18 they will have access to the funds that they need.
Just like a regular savings account, they accrue interest. But, unlike normal savings, you cannot touch the money that is in a junior ISA. It only becomes available when your child is 18. At that stage, only they can access it.
There are 2 benefits to this. Number one is that you cannot, under any circumstances, dip into their money. Secondly, your child will also benefit from the effect of compound interest. It is surprising how much a pot of money grows when the interest earned is left in place to attract even more interest. You can read more about the effects of compound interest here.
Sell on their used stuff
Over the years, we buy a lot of stuff for our kids. Raising a child is expensive. Yet when we are finished with things we tend to put them in the bin instead of trying to sell them on. You will be surprised by how much money you can raise by selling things on every two or three months. If you put the cash you make by doing so to one side you will soon have a nice little nest egg for each child.
Save your spare change
Getting everyone to put their spare change into a jar is an excellent way to save money as a family. Every few months, you can count, split it amongst your children and add it to their savings accounts.
It really is worth saving for your child now
The consequences of not saving for important life events like going to university and learning to drive can be serious. If you do not do this for your children, the chances are they will have no choice but to take a job they hate to earn the cash they need.
This could delay things like going to university, for several years. Or, worse, they could go without having the necessary funds behind them, and run up huge debts. Debts that they could struggle to pay off as young adults.