How much and for what, do you save for your children?

dan958

I don't have any children, so I am just speaking from the experience of how my parents dealt with my savings account growing up.

I was also taught about how important savings were. Every Birthday and Christmas, when family sent money, I (my parents) would always put some of that into my bank account, I was able to look at the little book I had that showed all the ingoings and interest.

When I was older, my parents said I could spend it on what I wanted, but they hoped that I would spend it on something sensible rather than blowing it all on video games or something of that nature. The savings helped me buy my first car and insurance (cheap car, as I bought it from my sister, but the insurance was expensive still).

I'd like to think that the upbrining I had has made me more sensible with my money.

atush

prezzacc wrote: »

Hi all.

Question... How much if anything do you save for your children? Also what do you plan for them to use it on and when, car at 17? Whatever they want at 21? Education? Nothing?

I have a 1 year old and have a couple accounts for her. No real plans as to what to save for her, if I fill the Halifax reg saver as we currently do & give her the money at 18, that's over £18k. Having little financial info from my parents it's important to me that I teach some financial literacy.
I myself got into gambling at a young age and wasn't good with money. Many years later I now consider myself fairly financially literate or savvy after wanting to look after my money and now enjoy reading and learning about finances.

Have a healthy emergency fund, save regularly, pension contributions and just looking into investments.

Im not even sure giving a lump sum is a good idea. Should I learn myself more about investing and teach how to save/invest and hand over control? Again I do want to teach about money not be given money "for nothing".

Long post to ask a simple question but appreciate any responses.

Thank you

50/m per child. Used for university costs.

And i taught mine about investing/saving from a young age.

PS my amts seem low but it was done for around 18 years so these are 'old' money amts

Flobberchops

prezzacc wrote: »

Hi all.

Question... How much if anything do you save for your children? Also what do you plan for them to use it on and when, car at 17? Whatever they want at 21? Education? Nothing?

I save £200 a month for my daughter, in a combination of cash and shares JISAs. The intention is for her to have a decent lump sum at 18 that she can either use for a big life decision (university, towards a house deposit, or starting a business are the kind of things I have in mind) or else use to generate a small tax-free income. I accept that the money will be absolutely hers at 18 and I see it as a challenge (and my responsibility) to spend the interim giving her a decent financial education so she doesn't make some disastrous decision. And if she does buy a pink sports car that she proceeds to wrap around a lamp post? I'll be philosophical about it, when I eventually calm down. Better to lose a fortune when you're young and have time to both learn from it and recover.

prezzacc wrote: »

I have a 1 year old and have a couple accounts for her. No real plans as to what to save for her, if I fill the Halifax reg saver as we currently do & give her the money at 18, that's over £18k.

More like £29k, no? If by "fill the Halifax reg saver" you mean pay in the maximum £100 each month, that's £1229 per year, which can be put in a Halifax Junior cash ISA paying 3%, over 18 years compounding to over £29k. By the way, are you planning on staying in cash, or investing? I would recommend considering putting at least *some* of your daughter's money, whatever proportion you're comfortable with, in a S&S JISA. 17 years is a long time for market fluctuations to average themselves out, and over that kind of timescale you would expect shares (or a fund) to outperform cash.

Flobberchops

user1168934 wrote: »

A few weeks ago we counted the money he had saved and it was around £1000 stuffed in piggy banks. :eek:
So now I am trying to teach him to invest the money he has saved. I explained the basic concepts to him and then put it all into VLS100.

Wow, that's fantastic. Your 9-year old is better invested than many adults. Sounds like he's on the right tracks.

user1168934 wrote: »

He has since been asking a lot of questions about how investing works. I have told him the story about not putting all the eggs in one basket.

Next time you go shopping, see if you can explain to him why when you buy eggs they all come in one carton... and you then proceed to put all the eggs you're buying in one basket/trolley

jaybeetoo

We opened an investment account for our children when they were born. Each month, we put the child benefit into these accounts (making sure we put the same amount in each account). The investments were mostly in investment trusts. When they got close to 18, the investments were sold and put into savings accounts. This money is being used to fund university accommodation and living costs.

If we’d used savings accounts, the money would not have kept pace with inflation. Using investments trust has meant the savings have grown well above inflation.

Flobberchops

MallyGirl wrote: »

I want my DD to be well rounded which is why she plays multiple instruments in several bands, works very hard at school to get the straight A grades she needs for uni and volunteers at a local animal rescue - stacking shelves in a supermarket would not add anything IMHO.

This is just my personal opinion but I think shelf stacking (or flipping burgers, or collecting glasses in a pub, etc) is a character building education all of its own. Both to acquire a bit of humility and respect for those working in manual or customer service positions, and also to get an appreciation for the value of money. As a 17 year old working on a supermarket till on minimum wage I spent a quiet spell between customers doing a back-of-the-napkin calculation of exactly how long it took me to earn each pound. I think the figure was something like one PENNY earned each seven seconds - to put that in perspective, that meant my compensation for dealing with a particularly rude or awkward customer might be on the order of 20p or so. That kind of realisation made me think twice (for a while, at least) about blowing my pay on luxuries or whims.


Excelling academically is of course very important, but it's jarring how little those GCSE and A-Level certificates count for anything a few years after the fact.

MaxiRobriguez

I don't think forcing kids to work for their money, or not giving them anything in order to be character building, holds any truth at all.

Educate your kids to understand the value of saving and investing rather than the price of consuming and they'll turn out OK. Whether you choose or have the means to give them a helping hand or not doesn't matter.

Albermarle

Maxi- I agree with what you say . You can teach kids the values of money and still treat them/help them out when needed .
However I think when you are older/a parent you might have to rethink your previous comment

I'm not going to buy them a car, or holidays for themselves etc - if they want those things they can work for them.

MaxiRobriguez

Albermarle wrote: »

Maxi- I agree with what you say . You can teach kids the values of money and still treat them/help them out when needed .
However I think when you are older/a parent you might have to rethink your previous comment

I'm planning to buy them things which they will need in order to excel in life and either cannot afford to pay for themselves, or wouldn't be able to do so without extreme sacrifice which would be detrimental to their life.

Things like a house deposit which may take them years to save for if they were renting, which would result in years of lost investment opportunity.

Car isn't necessary. They'll be able to get a bus round these parts where we live. If they want a car it's a luxury, and they'll pay for it out of their own pocket, if they value that over something else.

Is my general trail of thought! But we'll see, maybe I'll be easier on a daughter than a son and buy the bloody car!

Albermarle

maybe I'll be easier on a daughter than a son and buy the bloody car!

Don't forget the insurance and the repairs:)