From first steps to next steps
Content supplied by Barclays
Much as we love our darling children and dread the day they'll up and leave, no one actually wants their kids to still be living with them when they're all grown up.
And yet, according to recent discussion threads, which Barclays held with Mumsnetters, 7 in 10 of us don't think our kids are going to be able to afford to buy a home when the time comes.
What's more, research carried out in Barclays branches and on social media revealed that 41% are not preparing financially for future needs such as university fees and deposits for their first home.
The property ladder
The cold reality is that our children are going to need savings to have any chance of getting on the property ladder. As parents we are used to putting our kids first but saving for their future can't be done in a void. As 47% of us in the 35-54 age bracket recognise, it's not only important to put some money aside for our kids, but we also need to save for our own requirements such as building up a pension pot.
Long term savings goals such as these can seem unattainable, especially when we need to pay for things that need done right now, like that car repair, those new shoes or that outstanding bill. But for lots of parents combining different saving methods and ensuring that they build a savings element into their monthly budget gets them and their children that much closer to the first step on the property ladder.
Just £5, £10 or £20 a month can build into a decent nest egg by the time a child reaches 18, especially if you can add a little more each month as you are able – and if these mums are anything to go by, there are some pretty creative ways to make sure they have the means to meet those payment goals.
Ways to save
Mum of two, Emily Davis, has done it by channelling child benefit payments direct into her children's accounts since they were born and is already seeing the money totting up. Michelle McCarthy has a son and saves £2 coins for his account: "Every time we get some they go in Lucas's jar and it soon mounts up without us missing them."
Ad hoc payments also give savings accounts a useful boost. Katharine Sharp has one son, and she keeps topping his account up with cash by eBaying his clothes and toys when he's done with them.
Giving your kids a grounding in the value of things and the benefits of saving from an early age can help promote a healthy attitude to money. It can be worth enlisting the help of relatives and grandparents here too. Instead of adding to the stash of toys that are discarded after a few days of being opened, ask grandparents to buy just one toy at Christmas and birthdays and put the rest of the money they would spend on presents in a savings account. There are lots of options on other financially savvy gifts that will help to build toward your child's first home.
Saving for a significant deposit for your child's first property can seem like a 'to-do' task for tomorrow. But in the blink of an eye your toddler will become an independent adult. No matter how little the amount you can set aside, it can be worth saving it and building up funds when you still have years on your side. As an additional incentive, just think of your unruly toddler knocking round you house in 20 years' time when he's three times the size and twice as much trouble.
There lots of inspiration and information from mums on how they're making their savings work in the savings section on Family Finance, from Barclays.
Five top tips for building up long-term savings
1. Get into a routine
Think of your savings as part of your monthly outgoings - setting up a direct debit to put an amount into a savings account can help you get into a regular savings habit
2. Split your funds into three pots
View what you can save as three savings pots, for short, medium and longer term needs. Consider an instant access savings account for emergencies and look at higher interest rate options for funds that you are going to build up in the longer term
3. Explore tax-free options
Protect your savings from the tax-man by using your ISA allowance. If your child is not a recipient of £250 from the Child's Trust Fund, you can open a Junior ISA for them too. It's worth noting relatives can contribute to these too.
4. Suggest an alternative Christmas gift
Ask for a savings account as a present for your child instead of a toy. Your little one might not appreciate it now, but they'll put it to good use in the future.
5. Get children involved too
Get kids savings too - a penny savings jar is a great place to start, encourage them to fill it and see how their savings add up.
Your home may be repossessed if you do not keep up repayments on your mortgage
Family finance, from Barclays
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Last updated: over 1 year ago