It is only natural to want our children to have as many choices as possible, in life. That is why we invest a lot of time and effort in teaching them the skills they need to be successful.
But, for this to happen, you also need to give them a good start, financially. You don’t want your teenager who wants to learn to drive to not be able to do so because they cannot afford the lessons. Likewise, it would be a shame for a child who wanted to go to university or commit to an apprenticeship, not to be able to do so, because of a lack of money. With this in mind, I have put together some ideas to help you to save the cash they will need for those important life events.
A stocks and shares ISA from Wealthify s a tax-efficient way to invest in your child’s future. Or, if you prefer you could open a cash ISA. The two types of accounts offer different benefits. As a result, many parents decide to open both types and split the amount they save between them.
Regardless of which option you choose. There is an upper limit to how much you can put into junior ISA accounts. This is set, every year by the government. For example, during the tax year of 2019/ 20, you can invest, up to £4,368 into a junior ISA for each of your children.
It is important that the cash you invest in these accounts is not money that you need for your day-to-day expenses. This is because, once it’s in this type of account, it cannot be accessed by anyone, but your child. Importantly, they cannot do so until they reach the age of 18. Until, that money will not be available, even for a family emergency.
Open a standard bank account for your child
It is also a good idea to open a regular bank account for your child. These accounts are a great way to teach them about money. From a very early age, you can set them the challenge of monitoring how much they spend and tracking what they spend it on.
You can also encourage them to use this bank account to save for large purchases, such as laptops, consoles, and phones. If you would like to know more about children’s bank accounts, you can do so by clicking this link.
Buy your children some Premium Bonds
Parents and close relatives are allowed to buy Premium Bonds for children. Unfortunately, they do not accrue any interest. However, on average, for every £1000 invested one three people win at least some money.
Currently, the minimum win is £25. As a result of this, there is a fairly good chance that the money that you put into premium bonds will actually grow. Even if that does not happen, your child will still have the capital to spend when they reach adulthood.
It is important to realize that I am not a trained financial advisor. So, before deciding which option is the right one for you, it would be a good idea to do a little extra research.