Becoming a parent piles the responsibilities on us in a whole host of ways. Doing everything we can to ensure we are providing financial security for our children comes near the top of the list. Providing your children with solid financial foundations. As well as the right guidance on how to take on their own responsibilities as they move into adulthood will set them in good stead… Whatever surprises the world might have in store over the coming years.
Providing Financial Security For Our Children
Read on to find out some of the ways of providing financial security for our children.
Set up savings accounts for your children as soon as possible. Encourage them to put a little away every month once they are old enough to start getting involved in the process themselves. The high street banks all offer savings accounts, many aimed at kids. Firstly, it’s a great way to not only put some money aside for them. Additionally, it will also start their education in financial management.
Trust funds and ISAs
Banks and other financial institutions also offer ways to lock money away to create a nest-egg for your children when they turn 18. A tax-efficient option worth considering is a Wealthify Junior ISA. This allows you to save up to £4,260 each year for your child. It works in much the same way as a regular ISA, but the money is held in trust for your child, until they turn 18.
Talk to your children about money
Piling up money for your children’s future is one thing… But it will end in disaster if they don’t know what to do with it. It’s never too early to start talking to them about money and teaching them how to manage it. Avoid “shielding them” from financial topics. In doing so, you are just creating a problem for the future. Finance is not always the easiest of topics to talk about, but start doing so while your kids are young and you will be giving them the best shot at a stable future.
Syd is 6 now, and has been saving up her “spends” for a long time. This week, she counted out £25 and bought a play set she really wanted. She was beyond proud that she was buying it all by herself. Additionally, I was happy she had learnt a little about the value of money.
I need to hold my hands up here and admit that we aren’t insured. Our ongoing health issues mean hubby and I would pay higher premiums than most. So it’s not financially viable for us. However, for most people, a fundamental way to prepare for any eventuality and protect your children financially is by taking out life insurance. If you, your partner, or both of you die… The insurance policy will provide your children with the financial support needed to help meet both immediate and longer term expenses. It’s not something any of us want to think about. However, taking out life insurance is the responsible thing to do in order to be prepared for a worst-case scenario.
Name a guardian
Following on from the above, you should also name a guardian in your will in case the worst happens. This will be the person who takes care of your children and their finances in the event that you are no longer able to do so. This could be either by death, or incapacity. Of course, you need to have a serious discussion with the person or people you select. Firstly, to ensure they are comfortable with accepting this responsibility. Additionally, that they understand your intentions and wishes on how to handle your children’s finances.
Finally, why not check out my finance category for more posts like this.