5 ways to save for your children’s future

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Having children is one of the most incredible things you can do and raising them is as rewarding as it is challenging. It is well known that having a child is a huge financial commitment and when things are tight at home, saving up for your children’s future can seem like an impossibility. However, there are plenty of ways that you can save for your children’s future and here are five of the best.

Save a Little Every Month

Though saving may not be top on your list of priorities right now, saving a little every month is a great way to invest in your child’s future and the small monthly amount you put aside will add up impressively over time. Whether you invest the money, have a dedicated child savings account or a standing order from your bank, a small amount that is automatically saved means you will barely notice it going out. If you saved £10 a month for 18 years, with a 2% interest rate, then you would have over £2,500 when your child turns 18.

Open a Children’s Saving Account

Recent government changes mean you can no longer have a Child Trust Fund, but now you can get a Junior ISA instead, which is a tax-free, long-term saving account for children. You can choose either a cash savings junior ISA, a stocks and shares junior ISA, or both, though there is a limit to how much can be paid into the account a year. Parents can manage and open the account, but the money belongs to the child and there are a number of different banks which offer different terms and rewards for children’s savings accounts.

Teach them to Save

No matter how old your children are, teaching them good money habits is one of the best things you can do for them. Whether it is giving them a piggy bank that encourages them to save up, or a high-tech money box which calculates how much is currently in there, try and make saving money fun and rewarding for your children. You could match their savings if you want or give them ‘interest’ if they manage to save up a certain amount.

Buy Premium Bonds

A popular way of saving for your children, premium bonds are an investment product from National Savings and Investment. Backed by the treasury, the funds invested in premium bonds are secure and you are entered into a monthly prize draw to win between £25 to £1 million tax free. The maximum level of bonds is £50,000 but unless you win a prize, your money won’t earn interest and may be worth less due to inflation.

Purchase a Property Investment

If you have a lump sum of cash that you want to use for your children, then investing in property is a great decision. Property is an asset that continues to increase in value over a long period, and with buy to let property providing rental income too, you can save this or reinvest. There are a number of lucrative property investment opportunities available from RW Invest, with rental yields of up to 9%. The property should go up in value as your child gets older, so when you want to release the funds, you can sell the property on for a profit.

If you have found this helpful, why not have a look at this post which goes through all the things you need to understand about the beneficiary rules in the UK.

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