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6 Ways To Financially Set-Up Your Children

6 Ways To Financially Set-Up Your Children

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6 Ways To Financially Set-Up Your Children ”


Many parents and grandparents want to lend a helping hand when it comes to their youngster’s future finances. And, it’s not always possible, especially when thought about later. However, the earlier you do start, no matter how small it can all add up to a nice lump sum of cash to pass on to help boost their finances for life’s big purchases such as Further Education,  first car, or first home. 

Whether it’s a deposit for a house or starting a pension, there are few investment options to think about as a parent or grandparent below: 

Although this may seem bizarre, especially if your children are young, however, there is no time like the present when it comes to sorting out your pension, so why wait for your children? In fact, the earlier you and they start to contribute to it, the less they have to worry about their future financial security. Even a small investment now, could prove to be substantial in the future. In fact, if you invested every year until they were 18, and then it was left untouched until retirement, they may be sitting on a nice retirement egg. Doing this, is far better than handing them cash, let’s face it when they are kids it’s likely to be spent on junk anyway. 

If you have the funds to, making investments into property could be a great way to become financially secure yourself as well as having something valuable to pass onto your children and grandchildren. You will need to do some research into several property-related areas such as owning a second home or buy to let, cost segregation services by tax professionals, renovation costs, insurance costs, etc. As your children get older, you could always include them in the work too, get them to learn a little bit about the business. This way they may choose not to sell their inheritance and instead nurture it to grow. 

Only legal guardians and parents are able to open savings accounts for under-18’s, however, grandparents can still make contributions. You are able to put in a certain amount of money each tax year, depending on the type of account, and they are unable to withdraw the funds until they are 18. Though, some accounts are able to be run from the age of 11 with supervision. 

When your children get a little older, it is possible for them to have a bank account where they are able to use a debit card to make purchases in stores (some online). With this, there is also the option for them to open a savings account. If you can encourage them to start saving and make it a habit as a child, they are much more likely to save as an adult, thus, making them more financially secure. Also, you could challenge them to get their bank balance as high as possible to save for a big item they have been after. Perhaps suggest you paying their pocket money into their bank each week, or take them to the bank to pay in their birthday/Christmas money. 

Make sure you do plenty of research when it comes to children bank accounts, savings account, and ISA’s. There are many different rates, rules, and regulations that surround them. It’s definitely best for you to be aware of them before you set everything up. If you are eager to start saving for them, you could consider a children savings account that is linked to your own bank, this way you can see it on the same dashboard/app, easily transfer funds, and keep an eye on the rates. If you are unsure, it may be best to speak to a financial advisor. 

Although, they are financially independent when they are 18 ( or like to think they are) it’s a good idea to speak to them and encourage them to open a lifetime Isa/savings account when they turn 18. For each sum they save, they will usually get a bonus from the government. This is fantastic when it comes ot them making a purchase such as their first home. If you can help them to reach the contribution needed each year, and they save for just 10 years, then they will have a great deposit for a first home, or even be able to buy outright. Sounds simple right? However, there are fewer people who do this than do. 

There is, however, a catch. These savings need to be used for buying a house or be used in retirement, otherwise, they may have to pay some of the fund back ( the bonus). You can open Lifetime ISA savings account until you are 40, so it’s never too late to check this yourself too. 

This may sound simple, and a little bit silly. But, there are now many applications that enable you to save small unnoticeable amounts from rounding up your card transactions. It may only be a few pence here and there, however, it will soon add up. It’s very similar to having a loose change jar at home, however, it’s now digital. Afterall, not many people carry around cash all the while now. Why not try one of these and save all the little amounts over a year? You could pay it into one of the accounts mentions above such as their pension, savings account, or on a property mortgage. 

As you can see there are many ways that you can invest and save for your children’s future. Doing just one of these will put them in a better position financially, and help them to become financially secure as an adult. A lot of them will also help them to understand why it is important to be financially secure. Do you have any other ways that you do this? Please share some below. 





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