4 Easy Ways to Save For Your Child’s Important Life Events
We all want our children to have the best things in life. To be able to enjoy as many experiences as possible. The problem is achieving this can work out to be very expensive. To stand any chance of being able to afford to do things like send your child to university or take a gap year you need to start saving as soon as possible. Here are five relatively easy ways to do exactly that.
- Open a Junior ISA for your child
Opening a Junior ISA from Wealthify is a very good starting point. These accounts are designed to enable parents to save for their child’s future, in a tax-friendly way.
You get to choose between a simple cash only account and one where what you put in is invested in stocks and shares. The cash-only option is extremely low-risk. Provided you put under £85,000 into an FSCS protected account you will get all of your cash back even if the bank fails.
Whereas with a stocks and shares ISA there is more risk involved. You are relying on the stock market to rise in value. If it falls instead, and you have no choice but to cash that ISA in on your child’s 18th birthday, you could lose some of your capital. However, if things go well and the market rises fast, the chances are you will end up making money. If you click the link above and read some of the articles you will find there, the pros and cons of each type of account are explained.
- Let their grandparents help
If your child’s grandparents can afford to and would like to, do so get them involved. They could put a contribution into your child’s ISA. Or, if they prefer, open an ordinary savings account for each of the children.
- Encourage your child to save up too
Teaching your children to be responsible with money is a very important life lesson. A child that learns not to get into debt and how to save will very likely grow up to be responsible when it comes to their finances.
So, encourage them to start saving as early as possible for things like driving lessons and buying their first car. A lot of parents offer to match what their child saves as a way of incentivising them to save up more. This works really well, but you do have to be careful not to over-promise. Once someone gets the saving bug, even a child, it is surprising how much cash they can build up.
- Introduce your children to credit unions
In the UK, credit unions are actively working to attract young savers. As a result, a lot of them now welcome members from the age of about 7. There are some restrictions on their accounts. But, once they become adults they will be able to take advantage of the cheap credit that is on offer from most of these unions. It is a relatively safe way to introduce a young person to borrowing. You can find out more about doing this, by going to this page.