Emergency Fund
Children are expensive, and surprises can happen, making it crucial to have an emergency fund. A financial cushion can provide peace of mind and security for unexpected situations.
Whether your child falls ill, there are unplanned medical expenses, or you face extra costs for childcare, school supplies, back-to-school expenses or extracurricular activities, an emergency fund can help you manage these unforeseen expenses without financial strain.
Invest in a Children’s Savings Plan
With college costs rising, it’s wise to start saving for your child’s education as soon as possible.
The average cost of putting a child through third-level education during the period of 3-4 years is €66,152 with student accommodation and €46,560 with rented accommodation. It stands at €28,844 while still living at home, which is still a significant amount of money.
Children’s Savings Plan is a regular premium, unit-linked savings plan designed to help you invest in a range of investment funds from the start of the policy. Once you select your preferred funds, this choice remains in effect for the plan’s duration.
This savings plan is ideal for parents who wish to save for their children’s future and for relatives or godparents looking to set aside money for a child’s future needs. It is particularly suitable for those comfortable with saving over five years or more, offering a structured and potentially rewarding way to secure financial stability for the younger generation.
One of the primary benefits of a Children’s Savings Plan is its tax advantages. It allows you to maximise the Gift Tax benefits when saving for your child or grandchild by legally assigning the savings to them. This enables you to fully use the annual Gift Tax exemption limit of €3,000 per individual or €6,000 for a married couple.
To learn more, read our article “What Is The Best Way To Save For Your Child’s College Education?” for detailed insights and strategies. Alternatively, you can contact us, and our financial advisors will be happy to guide you through the best options tailored to your needs and goals.
Teach Kids About Managing Money
Teaching your child about money early on is one of the best gifts you can give them. Understanding how to budget, save, and invest will help them succeed financially in the future.
When kids understand money, they can make smart financial choices. This knowledge helps them become more independent and responsible. Learning about money early helps children feel confident in managing their own finances.
Start teaching money lessons that match your child’s age. For younger kids, explain simple ideas like saving and spending. As they get older, talk about budgeting and investing. Use everyday activities, like grocery shopping on a budget or saving for a family trip, to show them how money works.
Books, games, and online resources can make learning about money fun. These tools can help keep your child interested and make financial concepts easier to understand.
Pocket money can be an effective tool for teaching children about financial management. A survey revealed that younger children in primary school in Ireland receive an average of €6 pocket money per week, which increases to €10 per week for those in secondary school.
A good strategy for teaching children the value of money is to have them earn their pocket money through tasks. Parents can create a list of weekly chores children must complete to receive their allowance.
This approach gives kids a work ethic and a sense of responsibility, helping them understand that money is earned through effort and contribution. It also fosters discipline and time management skills as they learn to balance their tasks with other activities.
While parents must put in time and effort to ensure the chores are completed, the long-term benefits for the child’s financial understanding and personal development are well worth it.
For more tips, check out our article on how to teach kids financial responsibility.
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