Lots of us with small children at home worry about sorting out our financial affairs. Our recent research tells us that 27% of Tired Parents say that they worry about their finances but do not know what to do, 14% are usually “too tired to think about anything financial” and 15% “put their head in the sand”. Sound familiar?
But don’t panic. If you can fit a stairgate on three hours’ sleep, making some simple changes to your financial life is child’s play in comparison.
There are three things which I think parents need to think about when it comes to kids and money.
Wills – I know Mums are superheroes but I’m afraid we are still mortal….
Wills are not the most uplifting of subjects but they are super important. The law is still a bit mediaeval and if you are not married or separated, it’s not a good idea to leave your legacy to some bureaucrat in a suit. If you are unmarried, for example, your children will typically inherit and not your partner, which can make paying the mortgage a nightmare, or impossible.
Time and convenience are major headaches for most parents and top of the excuses list. However there are simple, free options where you can do an online will in super quick time. If you are nervous about making a mistake, there are low-cost online solicitor-provided will services where a legal eagle will cast their eye over things to make sure you haven’t made a howler. Irwin Mitchell have this service which starts from about £145 +VAT.
Next up – life insurance. This one is a biggie. Check out if you or your partner have this though work. If not, you’ll need some private provision. 44% of all British pet owners insure them. But just 40% of us have life insurance. So we look after Rex more than our other halfs!
Some people tell me that the cost puts them off. What might you expect to pay? A healthy 40-something who hasn’t hit the fags since Take That were No. 1 should expect to pay a little under £10 a month for £100,000 of life cover. Most money comparison sites will get you a quote in less than 10 minutes. Or we tip AIG who offer decent cover at an OK price with an immediate decision – details are on our website.
And (as if you weren’t doing enough for them already), children’s savings options?
Children’s savings accounts will usually pay a lot more interest than comparable adult accounts, but limit the amount you can pay in each month. The Halifax Kids’ Regular Saver pays a whopping 6% but you can’t pay in more than £100 a month, monthly payment have to be made and you need to let the money sit tight for a year before touching it. After a year, you get put back on the Young Saver rate, currently 2.25%. Nationwide pay 3% but there are a fewer rules and restrictions about access.
Alternatively, Junior ISAs are basically tax-free savings accounts for children you can contribute up to £4,080 a year into. Almost 3 out of every 4 of all Junior ISAs are in cash. If however, you are saving for your children and have a 10 year + timeframe, you really should think about the stock market – here’s why. A Barclays study shows that you are a whopping 91% more likely to better in shares than in cash over a 10 year period. And this leaps to 99% over 18 years.
There are more and more helpful online sites which will offer up ‘ready meals’ of investments if you haven’t the foggiest what to pick. I like Fidelity for stocks & shares Junior ISAs or download our free Junior ISA Guide for more tips and suggestions. Find out more at https://help.boringmoney.co.uk/tiredparents/junior-isa/ or watch the video below