Should You Setup Your Children's Financial Future For Them? - Porsha Carr Blog

Should You Setup Your Children's Financial Future For Them?

This blog post contains affiliate links & is a contributed post from a series of contributed post to come. This blog was not written by PorshaCarrBlog.com. For more information on contributed post click here.

Picture by Fu Zhichao

The puzzle on whether to support your little ones in the future by way of working hard to create them savings, inheritance, property, or assets establishes a divide between parents for various reasons. Here are a few insights to help you with a few of the reasons for and against setting your children up financially for the future.

Saving Skills

Choosing to set up a bank account for your toddler could get them into the habit of saving their pocket money from a young age. The action of taking them to the bank or encouraging them to keep a piggy bank and them seeing their money grow may inspire your children to learn valuable life skills. Such as, being patient and disciplined in squirreling away money can bring positive rewards.

Entitlement

Another perspective around setting up a child’s financial future is whether it might breed entitlement in children if they are aware they are going to one way or another receive a lump sum of money/assets in the future? For some parents, it’s a concern that this will only encourage them to take their foot off the pedals and cruise through life reliant on the option of your hard earned cash. A solution to this might be not to tell your children you have saved anything for them at all. This way what they will receive one day in their lives, will not affect how hard they work in life for a living.

Options In Life

For others, the idea that they can provide some financial support to their children as they age gives parents comfort. In an economy that’s prone to fluctuate and a world that is dependant on throwing up unpredictable costly events, saving a fallback fund of some description could be what your children need to; get back up on their feet, allow them to fund valuable education or training that could provide them a great career, or give them the option to travel and explore the world. As a whole, a pot of money could be beneficial to your children in providing them more options in life.

Spending Behaviour

If you begin saving into an account for your child that will transfer into their name once they reach a certain age, what they spend the money on you’ve spent years working for may not be used in a way you would have preferred. For instance, you may have had the idea that you’re saving to help your son or daughter with money towards a house deposit. However, they may want to use the money to start a business.
If you choose to save for your children, it’s wise to consider if you have any intentions for how you want them to use the money, and when they should be allowed to have direct access to it.
In other circumstances, you may want to consider how your existing wealth and assets will be allocated to your children if you were to pass away. Although this is a difficult subject to think about, companies such as Commerce Trust provide valuable wealth management advice concerning savings, for example, the tax implications surrounding your IRA should your children be entitled to it if you died.

Saving in one way or another is always a positive factor any person can have to help provide themselves with financial stability. However, whether you should provide financial security for your children is a personal decision that each parent decides based on what they can afford, if they think it's necessary and if it falls in line with their own values and beliefs for their children’s lives.

No comments