Disclaimer: This is a collaborative post.
As a parent you always want the best for your children, and this includes planning for their future. With this in mind you will want to give them a good financial grounding and make wise financial choices that will benefit them in the years to come.
Financial planning for your children is not too different to future planning for yourself although the goals will be different. In both cases the sooner you can start planning the better. Let’s take a look at the steps you can take to safeguard your children’s financial future
Start an UGMA Accounts
An Uniform Gift to Minors Act (UGMA account) allows individuals to create a custodial account where adults can set aside cash and other assets that a minor can put towards education expenses or other uses.
Parents and grandparents can contribute to the account which the minor will have full control of when they reach adulthood, and does not have to be put towards education.
Start Saving Early
The earlier the savings can start the better! Planning for your children’s future from the moment they are born is a wise financial decision.
By investing earlier you have a longer time frame with which to save, and with compound interest, there is the likelihood of better returns,
There is also the opportunity to investigate other investment possibilities rather than the traditional fixed deposit approach.
Teach Them Good Financial Habits
Teaching children about money will help to equip them with the tools they need to be good with money as they grow and into adulthood. It is important to have these conversations at home with children so they understand the value of money and it builds their confidence when handling money.
Children can start to manage their own money with an under 18’s bank card. These cards can be loaded with their pocket money and children can use it as a debit card. As a parent you have the reassurance of being able to see what it being spent and when.
Consider a pension investment
It may sound a little strange to be thinking about putting money aside for your children that they won’t be able to touch for almost 60 years but it is a very tax-efficient way to save for them.
Over such a long period of time any money invested in stock markets could see some significant growth and when your children enter the world of employment and begin to make pension savings themselves, you will have given them a wonderful head start on building their retirement pot.
Write a will
No one wants to think about dying but writing a will could be one of the most important things you do for your family.
Setting up a will will ensure that your assets pass to who you want when you die. It will also remove stress and anxiety from your loved ones at what will already be an upsetting time.