How To Save Money For Your Children
Saving money for your child is crucial. With rising inflation, it is becoming more and more expensive for families to support their child’s later life expenses. One way through which you can ensure that you get enough money for your child’s future expenses is by saving and investing in a sound financial plan.
Research has shown that the cost of raising your little ones until the age of 18 can rise to around £80,000. This calculation is an estimated figure that was reached by combining the price of education, clothing, food etc. However, this did not include the likes of housing, childcare and council tax. As time goes on, this cost is only expected to increase.
For new parents, the best way to ensure that you will be able to fund your child’s future expenses is by adopting a comprehensive savings plan. Saving small amounts every day can make a big difference. These amounts can go a long way e.g they could assist your child’s university fess, so that they’re not overburdened with student loans.
Student loans take years to pay off, and many people are stuck paying back student loans for periods as long as ten years. And a student loan isn’t the only significant financial expense; once your child reaches a certain age, he/she might also be needing a car, an allowance, and a mobile phone.
In this article, we’re going to be talking about a few ways you can save that money so that by the end of the day, you have enough cash to be able to fund your child’s expenses.
1. Start From Today
If you have a small toddler or a baby on the way, now is the perfect time to start looking for investment/money saving options. There is no better time to save than now, and many parents should realize this. Savings will end up benefitting you or your child in the long run, so what’s the harm in investing time/money in some saving plans from day one.
You could open up an savings account to start prioritising for your child’s future. Investing in bonds or ISAs for example is a great way to save because your funds also accumulate capital gains over time. Most savings bonds give out a return ranging up to 11%; this means that your investments will grow organically over time.
Another clever way to start saving/investing is by talking to a financial expert. Financial experts will help you calculate precisely how much money you need to save each month. I know what your thinking, sounds expensive, but look around you could be pleasantly surprised.
They will take into account external factors like inflation rate, interest premiums, future expected cost, and make calculations based on the time value of money. This calculation will help you figure out a robust plan to ensure that you are able to fund your child’s significant expenses when the time comes.
2. Monitor Your Expenses
Over time you can end up saving a decent amount of money, without putting in any extra hours at work. If you can just monitor your expenses and see where most of your money goes. Through identifying where your money goes, you can cut down and eliminate unnecessary costs and plough that amount into savings.
Knowing where your money goes is the first step, and it will motivate you to start spending wisely. Even small changes to your daily routine, like bringing your lunch from home. This things can defiantly have a drastic impact on your savings.
You could also cut down on your transport expenses, the average car cost around £400 a month to run. You could use the bus or the train, or even better a peddle bike. Not only will this help you financially, it will also assist a much greener/eco friendly lifestyle. Until you actually sit down and work out the figures, you probably won’t realise how much your personal transportation actually costs.
3. Get A Savings Account
Sometimes the simple psychological tricks help us save more. By having a savings account, you are subconsciously training your mind to save a set amount each month. Savings accounts can help you collect reasonable amounts of money over time. Having a separate account from which money can’t be taken out quickly enables you to spend a lot less and completely cuts down on impulse buying.
Another trick that many people use to save up is that they try to be as consistent as possible. Once you can understand your expenses, you can set a fixed amount of money to go into your savings plan each month. The fixed amount will help control yourself whenever you feel like buying something you don’t need. You will come to understand that the future goal is something way more important than what you want now.
4. Sell All Your Unused Junk
Kids grow up very fast, and it becomes tough for parents to save because they always need new things. If you have young kids, then you will know that there are often many things in slightly used conditions that your kids grow out of. Or even belongings that they have never played with or use.
You can sell these things at a discounted price to other parents that might need them, or at a boot sale for instance. This way, you’ll be able to regain some of the initial cost, which would have otherwise gone to waste.
5. Pay Off Your Debts
Paying off your debts is a very effective way to start your saving process. If you’re someone that has accumulated a fair bit of debt over the years, then paying these off before starting a savings plan is the ideal route. Interest tends to accumulate over time, and paying off your debt as soon as possible can eradicate further payments/interest.
If you make it a priority to pay off any loans as quickly as possible and work towards it, there’s no doubt this will ensure a better future for you and your family. You could opt for a consolidation loan that clubs all of your debts together, so instead of multiple repayments, you’ll only have one recurring loan payment to make.
Negotiating with your credit card company could be proactive. For instance, you could advise them that you’re willing to pay off some of what you owe but you’d want a lower interest rate for the remaining repayments. Additionally, you could also look for a part-time/temporary job to help you earn some additional money.