Thinking About Your Child’s Future

Having a child is a minefield when it comes to finances. Not only do you have to think about all the things they need whilst growing up, but now, more and more, people are thinking about their children’s future, whether they will want to go to university, need help towards buying a car, paying for their wedding day or need help towards the cost of buying their first home.

The truth is that our children face more debt than ever when it comes to these life steps, and will probably need a bigger helping hand than we did. Yet a surprisingly low number of people (less than 45%) surveyed by Shepherds Friendly said that they would consider opening a savings plan to save for their children, with only 35% saying they would put more than £50 into any account.

Should you be saving more?

Ultimately, there could be many reasons why we are not saving for our children, with lack of any disposable income being a major factor. But if we look at the infographic produced by Shepherds Friendly, we can see that if we work out what we can afford to save, and then times it by each month, we could be putting a sizeable amount away that could be used towards a wedding, a car or a first home. This is money that could make a major difference in the life of our children, but may be an amount that isn’t really missed – the price of a Costa latte each day.

An UGMA Account

One way of saving for your child’s future is through the use of an UGMA account. An UGMA is a Uniform Gifts to Minors Act accountm a type of custodial investment account that lets adults hold and manage financial assets for a child without the expense of creating a trust. Any adult can open one for a minor, and once established, the funds permanently belong to the child. Any related adult can do this, either parents or grandparents, acting as custodian of the account and making all investing decisions on behalf of the minor. Funds can be withdrawn at any time by the custodian, but the money must be used strictly for the benefit of the child, for instance, for college or schooling/tutoring.

Are you saving enough?

If you have ever asked yourself the question Are you saving enough? then you can go through each stage of the useful resource below to find out if you really could be saving more, and how that extra cash could be used sometime in your child’s future.

Your child will certainly thank you for it one day!

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