Having children is a huge responsibility but bringing up a child will cost you more than just time and patience. Recent figures suggest that raising a child to the age of 18 years old will cost you in the region of £250,000. You might think it’s all over once they’ve fled the nest but, unless you want them scrimping for money it’s time to look at the best place to save money for your children.
The first port of call for any mini-saver is the trusty piggy bank. Pocket and birthday money is squirreled away on a regular basis. In fact, if you children are thrifty the pennies can soon add. How many of you are regularly asked to check how much money there is in the money box? For me, it’s a weekly event you can set your clock by!
But, unless you child has a very large, very loaded piggy bank, it’s not going to go far. You’re going to need to find some other ways of saving money for you children… like these…
Putting money into a local banks savings accounts is probably the first money saving idea that springs to mind. I would never knock any attempts to put aside some cash for your children but… have you seen the interest rates? They’re low, especially now in early 2012.
That said, they are a great way to introduce your child to the dark arts of banking. Here’s tip for anyone opening a child’s bank account: take them along when you set up the account. Get them involved filling out the forms and listening to the advice that the bank staff have to offer. This should spur on your child’s interest in what happens to their money.
Online Savings Accounts
It only seems like yesterday that it took 5 days for my pay to clear in my bank account. Yeah, 5 whole days. Back in the mists of time, when I was 18, that was an eternity. Times have moved on rapidly and you can do just about everything online. A number of the online-only banks offer higher interest rates on savings. Some banks, such a ING Direct, even update your interest on a daily basis so that you can see it in your online account. It may not be a huge daily leap but it’s enough to get your kids thinking about how much more interest they’d earn if they had more money in the account.
In recent years, investment funds have become a popular destination for your cash reserves. Banks, being they way they are, have launched a wide range of funds tailored to the younger generation. Whilst returns are excellent (compared to interest on a standard bank account) you should get some professional advice before you leap in. Once you have the best fund you’re all set for some serious returns on you children long term finances.
Child Friendly Stocks
Are you really surprised to hear that there are child friendly stocks? Like fund owners, the stock market has trawled the world to find more ideas to bring money to the markets. Also, if you’re considering buying stocks for your child, get expert advice. The markets can be extremely volatile and the last thing you want to do is blow the cash in a bad market.
One more word of advice; don’t push all of your child’s money into the stock market. Take 10% – 15% of the entire saving pot and invest. When the portfolio makes money withdraw 50% of the profit then reinvest the rest. Your kids will rolling in cash before you know it!
My name is James and I run Money Saving Zone, a UK based website offering tips and advice for money conscious readers. I hope you enjoyed this post and I look forward to seeing you soon.