As parents it's only natural to want the best for our children and that includes their future. Money is one the of the most important life lessons that we will have to teach our children about as they grow up. We will need to teach them about how to earn it, save it, spent it wisely, invest in it and more! We always want them to have the things in life that we didn't and often have dreams for our children such a going to uni and buying their own home. Of course we want to save for their future as best as we can. There are several ways in which you can do this:
1. Set up a savings account - You can set up a savings account with a bank or building society on behalf of your child. Many of these accounts aren't accessible until they are 18 so make a lovely gift for your child's future however some of these can be accessed from the age of 7 to help teach your child the value of money and get them into the habit of saving from a young age.
2. Start a Junior ISA - If your child was born before September 2002 or after January 2011 and under 18 you can set up a Junior ISA account on their behalf. This is a tax efficient way of saving or investing each year as it's tax free interest! You'll be unable to withdraw any money until your child's 18th birthday. You can pay money in when ever you like or set up a direct debit which ever works best for you.
3. Set a target for your goals - How much do you plan to save for your child? Will you give them access to the savings once you turn 18? Perhaps you want to save for their first car or deposit on their first rented home well work out how much that is likely to be and decide how much you wish to save each month. I currently have a direct debit set up for both of the kids for just £20 a month so by the time they are both 18 that will be £4,320 in savings each. I do also pay in money from birthdays and Christmas etc too and maybe someday I will increase the direct debit but for now that's what works for me.
4. Start early - I cannot stress this enough, the earlier you start the better off their savings account will look in the future. For example if you started saving £10 a week for a child that's £40 a month, £480 a year and £8,640 before any interest is added by the time they turn 18.
5. Check that you are receiving the correct amount of child benefit - Some parents decide to put this away each month for their children of course that's entirely up to you but it's a great way of saving especially if you don't need it right now. HMRC pays £20.30 per week for the eldest/only child and £13.40 per week for each subsequent child. If you have once child thats £974.40 a year! To apply for child benefit find out more information here.
6. Cut back on outgoings - Perhaps you are spending too much on unnecessary things each month which could be put aside for savings instead. It's amazing how much a small saving can make!
Do you have a savings account for your children? If you're wanting to teach your children the value of money Jen at The Mad House shares some excellent tips on how to encourage kids to save which you can read here.