When life changes -
Raising financially fit kids
Many studies have found that teenagers leave school unprepared for the financial demands of adulthood. Thankfully, there are plenty of ways parents can help their children understand their finances.
Practical ways to teach good money habits
We suggest giving children four pots to show the different purposes for cash:
Spend – this pot can be used to spend on small treats
Save – this pot is designed to encourage longer-term saving and teach the value of interest, as well as delayed gratification
Donate – this pot helps you teach children about helping others
Invest – this pot is designed to introduce children to investing
If you have a savings pot, you might want to negotiate an interest rate with your child. Maybe they are saving for a bike, or another big purchase. Once a week/month you can review their savings pot and add “interest” on top, showing them that the more they put in the more they get out.
Choose something your child enjoys, for example coffees, clothes, cinema outings, trainers, etc. Look at the companies related to your child’s passion and build a pretend portfolio. Take a set amount of money and “invest” in some related companies. Ideally you could have a balance of dividend-paying and growth stocks. Review your investment performance and decide if you should buy, sell, or hold.
Support the entrepreneur in them
If your child has a business idea, offer them some seed money and help them invest it in their business. Speculate to accumulate, but they need to do the work to bring in the profit (and pay back their shareholders).
Hopefully some of these tips will help your children open up and talk about money and finances however old they are. As children grow, they are exposed to advertising and social pressures. Talking about these topics from an early age make them far less daunting.
Saving for grandchildren
Becoming a grandparent is undoubtedly one of life’s great moments.
Gifts and inheritance tax
Gifting can form a great part of your overall wealth planning strategy. By having the right plan in place and using the allowances and tax reliefs available, it is one way to maximise the inheritance you leave for your loved ones.
This communication should be considered a marketing communication. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research. It is for information purposes only and does not constitute advice, a solicitation, recommendation or an offer to buy or sell any security or other investment or banking product or service. You should seek professional advice before making any investment decision. The value of investments, and the income from them can fall as well as rise, and may be affected by exchange rate fluctuations. Investors could get back less than they invest. Past performance is not a reliable indicator of future results. The tax treatment of investments depends upon individual circumstances and may be subject to change.
The contents of this communication are based on opinions or conditions as at the date of writing and may change without notice. To the extent permitted by law or regulation, no warranty of accuracy or completeness of this information is given and no liability is accepted for its use or reliance on it.