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5 top tips to help you save for the milestone moments in your child’s life

23/06/2021

Creditfix > Blog > Creditfix Debt Help Blog > 5 top tips to help you save for the milestone moments in your child’s life

 

There’s no getting around it – kids are expensive. There are everyday costs to consider, from food and nappies to clothing. And over and above the bread and butter expenses, there are the big milestone moments that can cost you a small fortune.

You know the ones: Important birthdays, first cars, deposits on houses, and on and on it goes. If that seems like a lot to process all at once, the good news is you can start saving for your child’s future right away.

Read on for six top tips on saving for those big milestone moments.

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1. Start early

As with any savings plan, the key is to start as early as you can. That doesn’t mean you should create savings accounts for each of your three future kids while you’re still waiting to meet your hypothetical wife.

What it does mean is that, as soon as you begin seriously thinking about planning for a family, you should look to get your financial affairs in order.

That means putting money away during pregnancy that you know you’ll need when the child is born, budgeting for big expenses both early in their life and further in the future, and keeping money aside for emergency expenses. The earlier you start, the more you’ll save.

2. Understand your budget – intimately

No matter what you’re saving for, you’ll need a budget to make sure you’re getting the most out of your savings plan. When it comes to your kids, that is doubly true.

You can’t decide how much you can afford to save towards the important moments in your child’s future without a) knowing where you are right now and b) knowing where you need to get to.

Luckily, there are loads of intelligent budgeting apps and online tools to help you understand your cash flow and highlight the areas where you can cut back, including Monzo, Mint, and You Need A Budget.

3. Create a separate savings account

One of the biggest threats to your child’s future savings is the temptation to dip into the pot to pay for things that need your attention in the here and now.

There’s a simple solution – opening a separate account. You may be thinking that, as long as you have access to both accounts, there’s nothing to stop you from dipping into the money set aside.

That’s true, but ‘out of sight, out of mind is a saying for a reason – it works. It’s amazing how strong the psychological barrier becomes when you take the simple step of opening a separate savings account you know you’re not supposed to touch. Your kids will thank you later.

4. Reuse, recycle, resell

If you’ve ever asked your parents for advice on what to buy as a gift for a newborn, you’ll have heard this one before: “Don’t buy an outfit for a 1-month old, they’ll have loads of that. Think a couple of months ahead”.

Part of the reason raising children is so expensive is that kids quickly grow out of the things you buy them. Whether it’s the sleepsuit they only fit into for a week, or the fancy pram that’s now gathering dust – it doesn’t matter how much things cost, they’ll forget about them soon.

That isn’t a problem in itself, so long as you’re smart with the items you’re discarding. You can sell prams, car seats, and baby clothes on places like Gumtree and Facebook Marketplace. Not only will you be helping out fellow parents with a fair price, you can put the money raised towards the next big milestone that comes along.

5. Get your kids involved

No matter how little your kids are when you start saving for the big milestones in their lives, they’ll soon grow up. And when they do, they’re going to need to learn about money.

Whether you’re thinking about weddings, first cars, or an expensive education, one of the best ways to proactively save for your kids’ future is to get them involved in saving too.

That doesn’t mean making them cut the grass and rake the leaves to put money towards their schooling. What it could mean, however, is teaching them the value of money, helping them set realistic expectations when it comes to what you can afford, and helping them understand how important it is to set goals and work towards them.

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