Raising a family can be a terrifying thing at even the best of times. Even with an endless array of resources and rulebooks centred around doing it ‘right’, there is no one route to being the perfect parent! Of course, the job is made all the harder by the environment in which we’re bringing up our little ones – and the future is something that can loom large over what should be a happy and harmonious life.
Ways to Save Money for Your Child’s Future
This is a collaborative post
With life only ever seeming to get more expensive, whether looking at house prices, utility bills or wage stagnation, it is only natural for parents to turn their attention to their children’s future. Setting your children up for later life is one of the best gifts you can give them before they fly the coop, but what are some of the best ways to make that happen?
Creating Savings
Naturally, your first instinct will be to start putting money aside for your children. This is the most common way in which parents will seek to save up for their child’s future, but it can be approached in several ways. Savings accounts come in a great variety of forms, some of which might be better suited than others for saving money in the long term.
Basic saver accounts do not have the same high-interest rates they enjoyed before the 2008 crash, but as still useful for topping up a saved sum over time. If you already have some money saved up and have no intention of touching it in the meantime, there are other useful ways to make that money work a little harder for you. Savings bonds and some cash ISAs can allow you to lock money away for a fixed period, at a high rate of interest.
Stocks and Shares
Even in actively seeking out the best interest rates for savings, you might not be thrilled by the growth opportunities that cash-based savings afford. If you’re a little savvier with your money and don’t mind a slightly higher level of risk, investing your money via the stock market can be a powerful way to grow your children’s nest egg.
Savvier parents will also know to avoid the trap that is ‘day-trading’, and instead mitigate their risk by using index funds. Stocks and shares ISAs are amongst the best ways to invest in these funds, allowing you to generate returns tax-free – meaning more for your children in the future.
Alternative Investments
Of course, investment doesn’t need to mean engagement with stocks and shares, or market-led financial instruments. Indeed, the vast majority of us engage with investment in a much more practical way – be it investing in property or other tangible assets.
These kinds of assets provide dual value, not only in the monetary value they can accrue but also in the practical utility they can afford your children. If you have the capital, you could invest in an additional property for your child outright. You could even set up a rental opportunity and give your child the opportunity to make ongoing income from it.
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