Children's Savings Plan
The cost of raising children is ever-increasing and pressure is being put on parents due to inflation and rising education costs.
As a parent, you always want to do your best to help your child out financially and give them the best education you can when it comes to that time.
A Children’s savings plan is a savings plan that allows you to regularly invest in a broad range of investment funds.
What is a children's savings plan?
With the Children’s savings plans that we offer, your money is put in trust for your child, relative or godchild and the child will then avail of gift tax.
Ideally, it is suited for those who wish to save for 5 years or more.
A children’s savings plan allows you to maximise the Gift Tax when saving for your child or grandchild by enabling you to legally assign it to the child. Making full use of the Gift Tax annual exemption limit of €3,000 for any individual or €6,000 for a married couple.
What else can I do to help save?
Budget! As parents, we’d sacrifice anything to see our little ones get what they deserve. Budgeting is a great way to save money every month, even that €2 cup of coffee a day is €730 a year.
By a child’s 18th birthday that’s €13,140 in cash that you could have invested and gained the benefits of compound interest.
Why not try out our free budget planner, which tracks your income, debt, expenses & budget all in one handy spreadsheet…
Money saving tips for your children
When you give your children pocket money, encourage them to save a percentage of it. Doing this early in life will teach them that it’s a normal part of handling money. Have a see-through piggy bank or wall-chart at home so they can see the money growing. If they’re a little bit older they might make use of a credit union book or savings account.
Encourage them to set goals for their savings. If they’re young you could suggest what they save for, creating the excitement. If they’re a bit older it might be a Playstation or even towards their first car.
Do tasks to earn money for their savings. If they’re young it could be smaller things to help you out such as putting away their toys. If they’re a bit older, cleaning their room, hoovering, doing the dishes or mowing the lawn should all have set amounts towards their pocket money. Even adding a bonus for doing something difficult. This will let them understand that the harder they work in life, the more money they’ll make and the less they work the less they’ll get (Stay strong and stick to your principles!)
Teach them to budget. This might apply more to teenagers but.. If they’re looking to buy something and it’s €150 and they only have €100… It’s very easy for them to ask for the €50 and we’ll willingly provide it (if we can). Explain to them that they need to save that little bit longer, Mow the lawn or wash the car and then they get it. This can start at a very young age in a toy shop by teaching kids that they have say €30 or €50, Even seeing that they can get 3 toys instead of 1 can teach them at a very young age “value for money”.
Teach them about interest or matched contributions. Let’s say they decide to save €10 per week of their pocket money. You could agree you’ll match what they put in, or match half (whatever you can comfortably afford, remember it’s a valuable lesson for later in life with Pensions). You could also say at the end of a month you’ll add on a set % called interest on their savings. The more your children understand this, the better comprehension of Pensions and Investments they’ll have later in life.