Even though your child may be young now, you may not always be financially responsible for them. A proactive parent has to make sure any children you have are fully prepared for independence once they reach adulthood.
The later this process is started, the more your child may struggle to stand on his or her own two feet, without relying on the Bank of Mom and Dad. This can also coincide with instilling a good work ethic in your child. It will also help them understand the importance of doing their best and aiming for higher goals.
Savings Accounts
One of the easiest ways you can help your child to prepare for their independence can be to open a junior ISA account which will allow you to start saving on their behalf until they reach adulthood. These accounts tend to have a better interest rate than adult accounts, and can usually not be touched by either parent or child until the child is of age.
You are able to put small, easily affordable sums of money aside. Amount can either be deposited on a recurring basis or when you have the cash to spare. The deposits will continue grow over the years. There is usually a limit as to how much can be deposited each year, so it is worth checking the terms and conditions when opening an account. Make sure you meet all the guidelines and do not exceed deposit limits.
Pocket Money and Allowance
Another way to introduce responsibility into your child’s daily life is through “pocket money,” or an allowance. This can consist of a set amount each week or month depending on behaviour or chores your child completes.
A child can use this money to buy non-essentials they may like, such as a new game, or even decorative items for their bedroom. One of the benefits of the pocket money system is it enables budgeting at a young age, especially if the desired purchase costs more than a single payment they receive. This can then translate to adulthood, where budgeting and being able to save for items will come into play more.
Wills and Probate
Although it isn’t nice to think about one’s own mortality, there will come a time where you physically are no longer there for your child. No person knows when their death will be. Create a will when your child is young and keep it updated as your circumstances change.
A will allows you to dictate what happens to your assets when you have passed. And even who your child’s legal guardian should be if they are underage when this occurs. You set the age which your children will need be to receive your estate. This can help reduce the likelihood of impulsive spending of young adults. This can also help give your child the best possible start from a poor situation.
Looking after your children involves preparing them for life without you calling the shots. Do all you can during their younger years to teach your child how to be independent, as well as give them the means to start out on their own.
We hope you enjoyed this content. Check out some of other great content including How to Stop Living Paycheck to Paycheck.
