- Family and Parenting
Secure Family - Saving money for your Children’s future
"Yes! I'm in the money"
Children grow up so fast. Before you know it they are the same height as you or towering above you and they might start University, want football coaching, have an early wedding, need a deposit on their first property or want a car etc. Financially, we can support them, if we plan well and there are a few points below, which can help achieve this:
Child Trust Funds – In the UK, the government give £250 in form of a Child Trust Fund voucher to parents to open a special bank account for their child. Once the child reaches the age of 7, the government will give another payment of £250 or £500 if the parent(s) is on low income. Parents, family and friends can add up to £1200 to this account every year and there is no tax to pay on it for 18 years. If you make some regular payments, you are looking at a healthy sum in the future.
The child will be able to access the fund at the age of 18 and I’m sure a lot of working class parents will find this very helpful when that times comes, as it reduces or takes away financial pressure. Sadly, a lot of parents are still not taking advantage of this Government benefit.
I think this is a wonderful way to start saving for a child, I just hope the Government don’t stop it by the time I have a child of my own – knowing my Luck!
Regular Child Savings Accounts – You could also save on behalf of a child, in addition to the Trust Fund above or if you are not entitled to the Trust Fund (i.e. subject to immigration restriction) this could be a good option.
Check banks for the various offers. Some offer a high interest if you save regularly without withdrawing for 12 months, others will allow you to withdraw a limited amount monthly without it affecting the interest paid on the account. See More - Saving Plans for Children
"I'm bored! Why can't I spend my Trust Fund now?"
Save 10 % of Child Benefit – In the UK, the Government pay Child Benefit weekly to Parents for every child. The eldest child receives £20 every week and every other child receives £13 a week irrespective of whether the parents are working or not. If possible, set aside 10% or more of what you receive for the children. (I must admit the government are generous to children in the UK. (At present, all under 16s even travel FREE on buses. That’s some savings for the parents).
Personal Savings - Another alternative is to just leave money in an Account that you don’t make any withdrawals from. These days’ people have up to at least 3 Accounts. My Dad studied here in the 70s (Cambridge Scholarship) and worked p/time with my mum. After his studies, we all went to Africa and then I came back to the UK later. Long story short, my Parents used to send me cheques once in a while on their account in the UK even though they were no longer making Deposits. So, that’s another way of saving for your kids.
Teach your Child to Save – Finally, it is a good idea to encourage children to save for themselves at an early age. Get them to put money aside. Example, from a very young age you could buy them a piggy bank. If they have pocket money or money from friends and family – they could put some in the Piggy Bank. It’s a good saving habit to start them off with.
So, no matter how bad the economy is, you can be rest assured that your children will not go through financial difficulty in future and hopefully they will do the same for their kids.
Ps: I have mentioned benefits in the UK a few times, but I'm sure most countries have a similar benefit and can save accordingly. If your country doesn't, you still have 2 options above.