Your Child & Their Future: The Best Place For Your Savings? ~ the little lioness

Your Child & Their Future: The Best Place For Your Savings?

Collaborative Post

Given the amount of weird stuff happening with the world’s economy over the past decade or so, does anyone else worry about their children’s future? We live in uncertain times, and no matter how well loved your little ones are, talk of our children’s generation being less well off than the one before is incredibly concerning. If this sounds familiar, you are in very good company!

But there’s no need to panic – as long as you are a little smart with any money you have put away. Today, we’re going to take a look at a few clever things you can do with your money to help you give your little one the best possible start to their adult life. Let’s take a closer look at all the best options.

Green cartoon pigs with sunglasses on

The basics

Now, I appreciate the expense of having children means that not everyone will have any savings at all – and most people will relate to that. However, it’s really important to establish some kind of financial cushion that will help you through emergencies, rainy days and maybe the odd holiday once a year – if you’re lucky! We’re not talking about that money, however – never touch your emergency fund as it is an important buffer. It’s any extra money on top that we are discussing – spare money that you free up by making a budget, cutting some unnecessary costs, and maybe receiving as one-off gifts on birthdays.

Sure, it’s so tempting to spend all your income every month – and it might even seem necessary. But most households overspend without realising it, and I’ll bet that if you create a proper budget and savings plan, not only will you be able to build up an emergency fund, you will also find a little extra to put aside for your kids. It doesn’t matter how much or how little you can save – it’s the saving habit that is important. Now, let’s take a look at some of your savings options.


A lot of people scrimp and save a fortune to buy their first property, and it can be incredibly tough. But don’t forget that as soon as you are on the housing ladder, you own something you’ve never owned before – capital. And given how much banks love and trust capital, you are in a far better position to buy more. Sure, there are a few things to learn before buying an investment property. But, whether you rent it out to another family or start a holiday home business, the point is that if you are clever and ensure you cover all your extra home loan expenses with rental payments, it’s possible to have a second property at little cost. And in 25 years time when you have paid off your mortgage, you could gift that home to give your child the perfect start to life. It’s something of a myth that you need to be wealthy to buy a second property, although you do need to be financially stable and savvy.


Raising kids is expensive enough as it is – some reports think it is over $250,000 by the time they are 18. That’s an astonishing amount of money, but it doesn’t include a university education. If you want to avoid the huge costs of tuition fees and living expenses while they spend anything from 3-7 years at university, law school or medical school (we can all dream, right?!) then you need to be putting in some effort right now. There are plenty of options, from Australia’s special education funds that are solely for schooling, through to things like investment bonds that you pay into and get a return in 10-15 years. Other options exist, too. Term deposits are available from banks, credit unions or building societies, and are virtually risk-free. And you will get a higher rate of interest than your usual savings account in return, too.

Encourage your kids to save

Even when your little one is still toddling around bumping into things, a lot of people tell me that they grow up real fast. And by the time they go to school and learning some basic maths, they will also be able to start working out how to use money. Help them. Start by putting any birthday money into a high-interest, long-term savings account – and make sure you leave it there! Once they can work out the difference between a dollar and a cent, you can teach them how banks work by using a piggy bank – and let them see their money ‘grow’ by you paying them ‘interest’ for saving. And by the time they are getting pocket money, encourage them to put a dollar or two in the real bank every month, getting them in the habit of saving by themselves. Don’t forget that schools don’t really teach kids about money – it’s all down to you. And a financial education is one of the best investments you can make for them to ensure they are savvy enough to cope with the demands of the modern world when they get older.

Set up a trust fund

Finally, consider setting up a trust fund for your little one. A lot of people think these type of tools are only for the wealthy, but that’s not right – anyone can open one. They are, however, very complex financial tools that may need the help of an accountant to arrange. Trust funds are generally seen as ‘safe havens’ for any assets that you might have, that you are willing to hand over to your kids – and it will also keep them safe, out of the hands of creditors in the event you end up bankrupt. Which, let’s face it, is not beyond the realms of possibility when you consider the cost of raising a child! Ultimately, you act as a trustee, while your child is a beneficiary, and the trust fund opens up to them at a given point in their life – an 18th or 21st birthday, for example. There are a few different options, including a family/discretionary trust, a unit/fixed trust, and a hybrid trust. While there are slight differences between each of them, they are relatively easy to set up.

OK, so there you have it – a few ideas for you to save money for your kids. It can seem overwhelming when you feel like you can’t afford to save, but it is one of the most important things you can do for your little ones. Good luck!



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