How to save for your child’s late teens

If you think your kids were expensive before, just wait until they hit their mid to late teens. What was once a constant nagging for really quite small amounts of pocket money (for things like moulded plastic toys and brightly coloured sugary treats at the supermarket) will suddenly become requests for considerable amounts of money that no longer represent pocket money but would fit more in line with what we adults would reasonably term a ‘financial investment’.

Cars. Places to live. Travel. The associated costs of further education. Funding expensive artistic interests like film-making or acting or dancing. There may be marriages or civil ceremonies. There could be relocating to other countries or opportunities to invest in building a new home. Whatever it is, your children will find it, and they will come to you for help. So, how can we prepare for the onslaught that is the pre-20-year-old son or daughter’s demands on your spending power?

 

Don’t delay. Save now. Trust us.

 An ISA is an Individual Savings Account (this website contains information about junior ISAs – click the link). The basic principle is that the return on your savings is greater than the comparable returns from other banking accounts. Set it up. Pay into it each month. And let the interest rates add to your efforts.

Do you know how many monthly payments you’d be making into an ISA over an 18 or 19 year period? Well, let’s stick to round figures. Let’s say you pay into it for 20 years before handing over the cash. That’s 20 years x 12 monthly payments. That’s a grand total of 240 payments (or 216 payments if you were to hand over the savings account on their 18th birthday). That’s a lot of savings to be had – like, a serious amount of savings. But that’s only if you start now. Don’t leave it until it’s too late and wish you’d taken out a savings account years earlier – the power is in your hands.

 

Limit the number of toys – sell the rest

I once knew someone who had a limit of seven toys. The deal was that her parents would buy her a new toy once she had picked one of her current seven toys to sell. The money then goes into savings. See? When you explain that the money is still going to them, and that they will be able to buy a big shiny red car with it (or something as extravagant) when they are older, they will soon be on board with the idea of limiting their number of toys and selling old toys for financial profit.

This also means that you won’t be living in a house full of clutter, which any parent will tell you is a regular mess to tidy and re-tidy and re-tidy again, ad nauseum.

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