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Smart ways to secure your children's financial future

Jul 13, 2020.

Securing your family's financial future is as much about your own savings and future investments, as it is about teaching them how to save their own money. Educating your children on the value of money and managing their finances is a lesson that will serve them for life. Yet there will also be times when some financial support from their parents helps get them on their own two feet. Here are some ideas for the best way to start saving money for your kids’ financial future.

A future investment from day one

One of the easiest ways to begin saving money - without missing it - is to start early. There are lots of children's online savings accounts you can pay into from the day your child is born, and a little goes a long way over time. You can make regular small payments and top them up for Christmas and birthdays.

 

 

Swap gifts for your children for money

Instead of giving presents that quickly go out of fashion, why not consider swapping some of your traditional gifts for something more meaningful. For example, money towards a hobby such as music lessons or sports equipment. You can ask relatives to do the same. This also teaches children that they must save for items or experiences.

 

 

Give them an allowance

The best way to save money for your child's financial future is not only to grow your own savings, but also to teach your child how to effectively manage their own money. As soon as your children are old enough, give them a regular allowance. Work with them to plan, budget and save towards goals.

 

 

For saving money: open a children’s account

Once your child is old enough, swap the piggy bank for a real bank account or a digital budgeting app on their smartphone. This is an important milestone and will help give your child a sense of responsibility towards their money. If you're nervous about giving them too much control, you can use an app that allows you to monitor their spending and set limits.

 

 

Teach the basics about saving money

Many schools don't teach children about financial literacy and future investments, so it's up to you to fill the gap. This includes areas of finance such as what interest is, how credit cards work, investing in stocks and shares and the importance of a pension. This knowledge will be valuable to them in adult life, as well as giving them an appreciation of the value of money early on.

 

 

Invest in stocks and shares

Set up a share portfolio that you can eventually hand over to your children. Involve them in decision-making and use it as a way to teach them about investing and making a return. The stock market is challenging for everyone, so it's great if you can support your children in learning about how it works from an early age.

 

 

Use apps for managing finances

Use an app to make money management fun. Pennybox helps children understand the value of money by tying it to a task, like cleaning. Otly! enables you and your children to track their spending and saving. It also allows children to separate pocket money into different savings pots and see graphs of how their savings grow.

 

 

Clear your debts

Having too much debt can put you and your family in a vulnerable situation, should anything happen to you or your income stream. Try not to spend more than you earn and pay off any debts, such as credit cards or overdrafts, every month.

 

 

Write a will

This is one of those tasks you never want to think about but keeping your will up to date is so important, as it ensures your children are protected when you're no longer around to financially support them. If you haven't looked at your will in recent years, dig it out and make sure it's updated.

 

 

Talk with your children about money

Finally, it's worth remembering that your children's attitude towards money will likely stem from your own. Don't be shy in talking about your finances and how you spend, save and invest. As your children grow, involve them in decision-making and encourage them to save towards their own future. This will help ensure they reach adulthood with a healthy attitude towards money and maintain healthy habits towards spending and saving.

 

Planning for your children’s future starts today with the right savings and investment plans in place. Click here to find out more.

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