For kids who are being born today, you could make the argument that their financial future is more uncertain than any generations that have come before. Due to market conditions relating to the supply and pricing of property, coupled with the ageing populations and predicted problems with pensions,
there is a lot of moving elements that have the potential to affect our children’s sustained future financial security.
It is vital that we, as parents, are making the right decisions from day one to secure our kid’s futures and educate them on the right behaviours that will see them secure, no matter what the future holds. The purpose of this article is to give the reader some thinking points about what they can do to help and educate their children with finance. Read on to find a potential solution that suits you.
Create a Trust Fund
From the day that your child is born, you have options to put money in a trust fund that will accumulate interest value and will become available to them from the age of 18 or a time of their choosing. With a trust fund, you can start as big or as small
as you like and build from there. Many people fall into the false impression that a trust fund has to start with a big amount, to begin with. This is not the case, as everyone’s financial situation is different.
When your child is born, you might find that friends and relatives want to contribute and having a trust fund in place is the best way to put their money to work. It also helps to teach your child about savings habits from early on and shows the value of thinking long term when it comes to finance.
Grow in the Long-Term
Along with the trust fund option, there are various options you can take to accrue as much money as possible in the long term. While many
high street banks offer savings accounts for children, a bit of shopping around might show that a lot of these products are inadequate on the rate of return that they offer, and you might be better to shop around a little.
It is possible to
transfer your child trust fund to an investment professional as a means of increasing the gains you see on your initial investment in the long term. While moving funds across can require a bit of communication between the parties who manage them, it is the best option to take in the long term.
Teaching Financial Sense
We have touched upon what you can show your kids in a practical sense, but there really is no way of overstating the importance of showing your children how they should be saving and managing their money from as early an age as possible. Whether they are a toddler or a teenager, there are specific behaviours you can be teaching that will benefit them well into their adult lives.
You can take a look at
numbers games, pocket money, earning from a part-time job, and the ownership of financial responsibilities as a means of educating your kids. As we stated, there is a lot of uncertainty in the markets with regards to our kid’s chances to afford pensions and properties. It’s better to ensure that they are prepared now rather than short-changing them in the long term.