Why Are Children’s Savings So Important?
Generally speaking, children do not need money. As a parent, it is your responsibility to ensure they have adequate food and clothing. It is up to you whether you buy them luxuries, or if they share that responsibility using any pocket money, allowances, or earnings from part time jobs.
While you can get a lot of cute piggy banks and money boxes, these will not do as much for your child’s money as junior ISAs or savings accounts will. Teaching your child to grow their money, rather than allowing it to sit in a fancy container, will benefit them much more.
Starting savings from a young age can allow your child to develop a healthy relationship with money and spending in general. Instead of allowing them to continuously make impulsive purchases simply because they have the money to hand, it is vital that you explain the importance of saving, and its uses.
Right now, their focus may be on the latest candy or games, but, in just a few years, they will need to consider other forms of purchasing. These will be unaffordable unless your child has learned how to put money aside and let it grow.
From the age of 17, purchases can be substantial. If you consider the cost of driving lessons, tests, a first car, insurance, and tax, the price quickly adds up. While you may be willing to pay for some, or all, of this, getting your child to chip in can help them understand a good value for money.
Likewise, they may also want to buy a house in future. Currently, the average house price is over £220,000. The money for a mortgage must, again, come from somewhere.
A child who has grown up saving money and using a form of savings account will feel much more comfortable, and capable, of putting money aside each month while budgeting the remainder that they have. Without this essential life skill, your child may feel overwhelmed by the large amount of money they need to put aside, which can be a block on some people to initiate the savings process and work towards a larger goal.
Teaching a child to save will also help them to budget their money better, especially when taking money out of their wages to put into a second account is already a habit of theirs.
Whether your child is 2 or nearly 20, it isn’t too late to start instilling good savings habits in them. Albeit, it will be easy to get a younger child into a healthy routine than a child who has already developed bad money habits.
Overall, a children’s saving account will allow your child to manage their money in a way that you can still monitor. Some will prohibit withdrawals until the age of 18, meaning they will have plenty of time to get into positive money habits before they can access the money they have diligently put aside.
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