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Save for your kids – or let them learn the hard way?

With many parents too cash-strapped to save for their children’s future, what’s the answer to giving your kids a helping hand? One school of thought says wait and let them learn the value of money, but is this right?

With university tuition fees about to rise to £9,000 per year and many young people struggling to get onto the property ladder, it’s probably never been more important to put money away for our children’s future.

And yet it seems many parents aren’t. A new report by myvouchercodes.co.uk has highlighted that 64% of parents with children under 10 haven’t saved any money for their kids’ future.

But for many, money is tight at the moment and I doubt many families have much spare cash to squirrel away. And, as long as unemployment continues to rise, it’s likely to stay that way.

Ways to save for kids

Child Trust Funds (CTFs) were introduced by Labour amid a fanfare in 2002 and were reasonably successful in encouraging saving for children among people not used to putting money away.

The current government has stopped contributing to CTFs and is about to launch tax-free Junior Isas as an alternative. These will lock in funds until the child reaches adulthood – but there will be no government contributions.

Savings accounts designed to let you save for a particular family member or a specific purpose have proved popular. They provide a trigger to start saving and bring some discipline into money management when it would otherwise be too easy to find an excuse not to save.

Grandparents getting in on the act

It’s often grandparents who contribute more than parents to children’s accounts – it is in the case of my two children with their mum’s generous parents regularly topping up their CTFs.

This trend is often a result of granny and granddad being part of the ‘golden generation’ with money to burn – recipients of generous final salary pension schemes and beneficiaries of previous stock market booms, who’ve paid off their mortgages.

But while it’s generous of them to save for their grandchildren, is it wise? The counter argument is that it’s better to build up our own wealth in a sensible way and that, eventually, our children will inherit this wealth at an age when they’ll put it to ‘better’ use. It seems many follow this theory, with nearly a quarter of people in the report are holding back from saving for their children in order to teach them the value of money.

Do you think it’s important to put some money away to give children a helping hand in the future? Or is it better to maintain a decent standard of living now and teach kids a vital lesson in how to manage their own finances?

Is it right to save for your kids?

Yes - they need a helping hand (54%, 108 Votes)

It doesn't matter - they must learn the value of money (40%, 79 Votes)

No - they should learn the hard way (7%, 13 Votes)

Total Voters: 200

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My grandparents helped my parents buy a house back in the day for £4000, but that was just my Mums parents, my dads died before I was born.

We were very poor growing up and I often went without all the things that other kids enjoyed. I didn’t care though as it was all I knew. I just accepted what my parents could provide and got on with it.

But what actually is a decent standard of living? Being able to afford sky? Owning a new car? buying rather than renting?

If your answer includes any of the above then you get no sympathy from me. Why should we be “entitled” to anything except a roof over our heads and daily food and drink? Why are “human rights” distorted by so called “consumer rights”? (rights to a working ipod, mobile phone and satellite tv)

Saving for your kids or encouraging them to learn the value of money? I think there should be an element of both. At three, my daughter’s a bit too young to start actually saving (although not far off), but I do make a massive effort not to buy her too much stuff and to encourage her to learn to make her own fun with what she’s got.

But I do want to save for her future, especially with university fees the way they are. I’d hate her to miss out because we didn’t think ahead. It’s a shame the Child Trust Funds have gone – we have started one and save extra into it each month, but will probably transfer it to a Junior Isa when they are launched, I just hope it gets a better return than my Isa is right now!

Yes children need a hand and it is nice to be there for them and their children. Both my wife and I have saved all our lives but not for the children we saved for the family. If the children needed help we were there for them, but first they had to show some effort from themselves, there is know way I would tell a child I was saving for them, it removes the incentive to do it themselves.

We never managed to save anything until the children started leaving home and we found ourselves with a small surplus each month. This was invested into Tessas, later Isas, but was by no means enough to fund retirement. Then we realised we were “house rich” and “cash poor”, so we sold the family home, cleared the mortgage, bought a house for half the price and are now in a comfortable position to face retirement and help our children out now and again. The kids have all learned the value of money from an early age – we could not afford to hand out pocket money, so they delivered papers and leaflets, worked in the local supermarket part time and paid their way through their teens. We went 50/50 with the cost of driving lessons, but made them buy their own cars and insure them (admittedly, insurance was not so high then as now), so they looked after their cars and drove them carefully. So many of their friends crashed “mummy’s car” within weeks of passing their tests. Our three are all in their 30’s now with only one road accident between them. Kids have got to learn the value of money, that way when you help them, they appreciate it.