Preparing the next gen from financial struggles

Setting children up for financial success is just a few steps away.

12:17 22 April 2013

When the economy is questionable families tighten their belts to set aside savings in the event of unexpected financial struggles. This is often a short term reaction to the economy’s financial situation, but there are other pressing matters to consider for families. The cost of decent education is on the rise. By the time children are ready to attend a university, lending may not be enough to ensure a child is able to attend.

 

Educating our children is necessary in order to provide them with the opportunities to succeed and flourish in the world but financial struggles can affect them into their adulthood, and even stymie their career goals by keeping them out of college. One way to ensure that the next generation doesn’t need to suffer through similar financial struggles (hopefully) is to make sure they are able to attend university.

 

It’s never too early to begin thinking about the possibility of financial struggles. Even if everything seems to be going fine, nothing guarantees that your children will experience a healthy thriving economy. Setting children up for success, whether in university or in life, is crucial for a happy and healthy society.

 

Junior Individual Savings Accounts (ISAs) are an ideal way to start thinking about the future and establishing good savings habits in your children as well. Here are the ways Junior ISAs can help teach your children about good savings habits, and get them to university.

 

• Junior Cash ISAs—these savings accounts will earn tax-free interest and because these accounts are not involved with shares, there is no risk of loss. The interest rate is smaller than some other types of accounts. Also there is an annual limit of £3,720 for contributions which can be used all for one type of account or split between two different Junior ISAs.

 

• Junior Stocks and Shares ISAs—these accounts offer the potential for better interest growth over a shorter period of time. Again the earned interest is tax free. The difference with these types of accounts is that the outcome is dependent on the market and investments. If you are already experiencing financial struggles you may feel more secure with a Junior Cash ISA or perhaps with one of each and just a smaller amount in the Stocks and Shares Junior ISA.