Having a child is an absolute blessing, but it can also come at a cost. When you then factor in the rising living costs, as well as wanting them to have the best possible start when they eventually become independent, this can cause a lot of concern. By considering the options of giving your child a financial head start when they are younger, you can potentially build up a reservoir of money that they can acquire in adulthood, allowing them to save for their first car, or even to go towards buying their own home. Let’s explore how…
Set Up a Junior ISA
While you may have your own bank account, as well as potential savings accounts that can be accessed at any time, these won’t be designated for your child. Instead, you might opt to open a Junior ISA account for them, allowing you to continuously save money and receive interest on their funds up until they gain full access of the account. This money cannot be touched until your child’s 18th birthday, meaning there is no risk of it being spent elsewhere. Using a guide to Junior ISAs, you can figure out what kind of ISA will benefit your child the most, and then either make regular payments via standing order, or simply put money in as and when it is affordable to you.
You can buy premium bonds for your children, from any whole pound amount between £25 and £50000. Each month, every £1 is entered into a draw to potentially win extra money. Although there is no interest paid on this money, there is that chance to win extra over the years, and it means that the money will be kept secure. Once your child turns 16, the bond will be signed over to them, if it is in their name, and they will be free to either cash it out or continue trying to win extra money.
Depending on the age of your child, they may be able to open a child’s savings or current account. Not only does this help them save their money, but it can also be an invaluable tool, teaching them about budgeting, how to use a bank account, and how to save money themselves. Different banks and building societies will vary when it comes to age and other requirements, so it can be a good idea to do your research, alongside your child, before choosing your preferred provider.
Putting money aside for when your child is an adult can be exciting for both of you. By sharing the experience with them, you can help create a positive relationship between your child and saving money, which might prove useful in the future, and prevent unnecessary spending from occurring.
You do not necessarily need to deposit large quantities of money either. Making small, frequent deposits can help you to build up that stockpile, without putting you in financial jeopardy in the present.
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