Protecting your children's financial future
Watching our children grow is an amazing feeling. In the early years, those key milestones come thick and fast – that first smile, laugh, crawl, walk…all providing great memories.
However, that well-worn phrase ‘don’t they grow up quickly!’ is definitely true and it isn’t long before we’re thinking about other milestones – university, their first car, first house, wedding; all distinct possibilities further down the line.
While smiles and laughs are free, the latterly-mentioned milestones are, in the main, far from it.
For those in a position to do so, helping our offspring along the way financially and providing a platform for their future is a natural and innate desire – we’ll do anything to ensure their lives are happy and fulfilling.
Money most certainly isn’t everything, but taking steps now to safeguard and aid your children’s future can be a smart move financially and offers peace of mind to you as a parent or guardian.
Here are five ways you can start protecting your children’s financial future today:
Saving accounts or ISAs
Opening a dedicated account for your child and making regular contributions can help build a cash fund while, usually, returning a modest amount of interest in the process. Junior ISAs are another option. There are various elements to consider, such as an annual deposit limit and no Government contribution, but interest rates are relatively favourable and the money is tax-free.
Promoting good habits
Having a good understanding of money early on can help promote sound long-term financial management for your child. No, we’re not suggesting you read your eight-year-old the Financial Times every day but pocket money for simple jobs around the house, for example, can be a great way to develop their understanding of money, budgeting for purchases – such as a desired toy - and the concept of how money is earned.
It can be an uncomfortable feeling to envisage a time when you are not around for your children. We may not know what the future holds but taking out life insurance can be a great way of putting those worries to one side, safe in the knowledge that should anything happen to you, your family are financially supported.
Consider your estate
Thought should also be given to your overall finances and assets. Do you have a Will and is it up to date? Do you have an executor to your will? What savings, if any, do you have and are they working hard for you? What assets make up your estate? A good financial planner can help with all these questions and more – ensuring you are creating strong foundations for your children’s future in the process.
Budget from day one
The prospect of making significant contributions to your child, such as paying university fees, can be daunting when seen as a lump sum. However, budgeting to allocate smaller amounts each month into savings for such milestones in the future can certainly help. As the years go by, you could be in a position to build up a healthy nest egg for when the time comes.
The decisions you make today can have a big impact both now and further down the line when it comes to providing financial support for your children – as we’ve already said, they grow quickly!
At JP Financial Planning, we know how important your children’s future is and we understand that each individual’s circumstances and needs are different.
Why not make an appointment to speak to James Prince today to see how your family’s finances could prosper both now and well into the future.