*This is a collaborative post
You want to give your children the best start in life and safeguard their future. Yet that can be a struggle if you don’t have a lot. Luckily, you can put away small amounts of money that will grow into a valuable pot later. Saving for your child’s future does not have to be a huge burden. Below, we discuss how to turn a little into a lot for your child.
Start Saving Early
The earlier you start saving for your child's future, the more you amass over time. This is even more vital if you are on a low income. Large amounts don’t need to go into this. It could be as little as £20 a month tucked away into an account.
All those tiny amounts will soon add up and become even bigger if they accumulate interest. This is known as compounding. The interest you gain adds to the total, and then gains interest itself. By the time your child is older, they should have a sizeable nest egg to get started.
If you do have assets, you may consider selling them and putting them into this early so you can gain more interest. Think of it as a starting boost. Selling a second property is a great way to do this. It could be one you have acquired as an inheritance, or bought for rental, that has now become a burden on your time and resources. You can even sell property for free, cutting down on estate agents' fees with a cash offer. This also takes off a lot of the hassle associated with traditional selling, which may involve many parties and lengthy chains.
Consider a Junior ISA
You can save up to £9,000 in a Junior ISA for each of your children every year. Known as a JISA, they can be opened by parents or guardians. This money is then locked away until they are 18, when they become the account holder. At this point, they can spend the money or turn it into an adult ISA.
Although parents open them, anyone can contribute. The money in it can be saved as cash, stocks and shares, or a mix of both. Current JISA rates are subject to change, but some of the top ones can give around 4% rates of interest per month. You don’t pay income tax or capital gains on these accounts.
Automate Saving
With all the time constraints and responsibilities put on a parent, it can be easy to forget about saving. Thus, it helps to automate your savings so that the amount is deducted and deposited automatically. This can be done by setting up a simple direct debit.
You may also wish to consolidate any other savings into one big account. Perhaps you have old and odd bank accounts lying around that have money in them. Clear these and add the funds to your child's total.
With all this in place, you should be able to build a good amount by the time your child reaches adulthood. A little goes a long way. Save and invest it astutely, then watch them enjoy it, perhaps even with their own children, in the future.
