Money Matters: What does it mean to be a parent?

Parenting: it looks different to each of us. Perhaps you’re a young parent, or maybe you entered parenthood later in life. You could be nearing the end of a pregnancy or trying to conceive – and you may be called ‘Mum’, ‘Dad’, ‘Stepmum’, ‘Stepdad’ or anything and everything in between.

Every journey into parenthood is unique and the challenges faced as part of that journey on differing scales. What matters most is the type of caregiver we are – and regardless of our own childhood experiences and our route into parenthood, most of us have a shared goal: to give our little ones the very best start in life.

 

In the first of our new ‘Money Matters’ series, we’re looking at what it really means to be a parent – and how you can help your children get ahead, financially speaking. Read on…

 

Make a Start

 

As a parent, you have enough to think about.

 

• Are they keeping up with their peers academically?
• How much freedom should you give them?
• Are they sleeping enough…?
• …eating well?
• …exercising often?

 

Try as we might, many of us keep ourselves awake at night (and worry during the day, too) about all these things and more. If you’re fretting about your child’s financial future, you may be able to take a weight of your mind by opening a savings account now and depositing what you can afford – however small – each month.

 

“If you put £25 a month into a savings account paying 2.45% from a child’s birth until they turned 18, they would have £6,775 by the time they reached adulthood, according to savings tracking website SavingsChampion.co.uk.” – states The Guardian.

 

Of course, £25 may not be manageable for every family, but starting now – even in a small way – can make a big difference later.

 

Consider Tax Efficiency

 

Did you know, every child can have up to £9,000 saved into a junior ISA (also known as a JISA) on their behalf, each tax year? Anyone can contribute to it, too; the child’s parent or legal guardian opens the JISA, but family, friends and relatives can deposit money into it – and money saved can later be rolled into an adult ISA account.

 

The best bit? The money is locked away until the child reaches 18, so you can be sure that what you – and others – add to the account can’t be withdrawn until then.

 

With as little as a pound, you can open Unity Mutual’s Junior ISA* for your child and start saving now – well, why wait?

 

Invest a little money now – either a lump sum or a regular monthly contribution – and give them a monetary boost when they need it most.

 

Teach Them Important Financial Lessons

You may have potty trained them – and you might have even taught them to ride a bike already; have you educated them about money yet?

Instilling important life lessons in your child doesn’t have to be another worry to add to your list, though. Instead, you can simply involve them in your day-to-day financial transactions, where possible, showing them why shopping around for good deals is sensible, and why prioritising the essentials (and saving for little luxuries) makes sense.

When heading to the supermarket, give older children £5 and tell them to buy themselves a snack or a small treat or two and see how far they can stretch it, teaching them the importance of budgeting in the process. As you go around the shop, tell them about why buying in bulk often makes more sense, or looking for offers at the end of the day.

While online debit cards are gaining traction as a reliable way for young children to save, there’s no harm in breaking out your old piggy bank and teaching them valuable lessons about putting aside their pocket money and watching it grow.

Give Them Some Independence

While opening a Junior ISA is of great importance – since young children can’t do this themselves – it may be a good idea to give children a little independence where money is concerned, such as giving them that £5 note to help you do the weekly shop (or treat themselves as a reward for, say, helping around the house).

Many children love the sense of pride that comes with saving – or spending – their own money. They quickly learn that money runs out – and that earning it can feel good. Coins – and money on a debit card – are then less likely to be taken for granted and, in the process, you are teaching your child one of the most important life lessons around.

Want to know more about our financial products, including our Junior ISA, the Child Trust Fund, and our Children’s Savings Plan? Simply get in touch with our friendly team, we’re more than happy to answer any of your questions and talk you through the each product’s features and terms and conditions.

How do you talk to – and teach – your kids about money? Let us know here on the Unity Mutual blog.

Until next time…

 

*Terms & Conditions apply.