As a parent, you want to make sure that your finances stretch as much as possible, and that you also impart good money habits onto your children, no matter how large or small your monthly income is. By considering how much you earn, as well as your monthly costs, you may be able to be more strategic with your money.
Apply for a Junior ISA
The current junior ISA allowance is £9000 per year, although you do not need to reach this figure. This means that you could have a substantial amount of money put aside by the time your child turns 18, and that is without factoring in the amount of interest the account can accrue. As long as you have parental responsibility, you can open an account for your child, and children aged 16 or 17 are able to open their own account. The money within this account is not taxed, meaning none will be lost, and there are no minimum payments you need to meet, meaning the amount you put in can change depending on your own financial situation.
Reduce Your Outgoings
Having a child is no cheap feat. The cost of raising a human being from birth to adulthood is said to be over £75000 for a couple, and considerably more for a single parent. Due to this, any savings you can make are always welcome. Whether you try to reduce the amount of rent you pay, shop around for better utility prices, or even opt to cook at home rather than dine out, is up to you. Either way, saving a few pounds here and there can quickly add up, giving you more money either for your savings, or to ensure that your child doesn’t miss out on some of the key experiences of their youth.
Learn to Say No
While you might want to give your child everything that they desire, this can be a bad idea for a number of reasons. Not only can it put you in financial difficulty, but it can also potentially raise them to believe that they will be handed everything they want in life. Instead, telling your child no, or getting them to save up their allowance for the item instead can teach them independence, and that life will not always go the way you want. This may initially be difficult, particularly for younger children, but this resilience can help them in adulthood, as well as instil a sense of independence and understanding that wants must be worked for, rather than expected.
Being smart with money doesn’t necessarily mean you need to deny yourself and your family pleasures in life. Instead, it means making decisions that won’t see you out of pocket and teaching your children those same good habits that can give them at an advantage when it comes to managing their own money. When you consider that enabling your children to be autonomous adults is part of parenting, it is easy to see that knowledge about money is one of the key life skills they need to be taught.