Saving For Toddler L’s Financial Future

Here’s some info for you – kids aren’t cheap! I’ve not worked out what 2.5 years of having a daughter has cost us financially (only mentally and physically), but I imagine it’s an eye-watering amount. As an example, purely doing two days at nursery for the last six months has set us back over £3,000. Then, when you throw in essentials like food, clothes and nappies, along with (arguably) non-essentials like toys, days out and babyccinos, that figure shoots up massively.

It’s not just what we’ve spent that’s concerning though. Thinking about the future is even scarier financially – according to a survey, raising one kid from birth to 21-years old costs a whopping £231,843. That’s not far off what we spent on buying our house. Sure, a house can’t love you unconditionally like a kid, but at least there’s a good chance of making a profit when you sell – you’re unlikely to ever get any money back from your kid!

With stuff like increased Uni fees, an inflated housing market and rising cost of living, I fear Toddler L is going to need all of the money we – and she – can muster. That’s without even considering unknowns like the impact of Brexit or any of the other stuff that could cause global turmoil. I hate to sound OTT, but hey, that’s the ‘fun’ stuff you think about when you’re responsible for bringing life into this world. Even though things like going to Uni or buying a house feel a long way off, it makes total sense to start planning for that future today.

I like to think that I’ve always been good with money. As a kid, I spent a bit of pocket money on things like CDs, stickers and footy mags, but my mentality was always one of saving for the future, even if I didn’t know what the future would bring. Even from a young age – namely a 12-year old earning a paltry £10 per week on a paper round – it was firmly rooted in my mind to save what I could for the future. As I reached adulthood, I got more savvy with my money through things like cashback credit cards, ISAs and high interest regular savings accounts.

Having this mentality has massively helped us as a family. The fact that I always saved meant that we could do things like go on nice holidays, buy a house and effectively both be off work during Hay’s maternity leave. I’ve always viewed saving money as something which will provide choice. Rather than being forced into a position due to financial constraints – e.g. going back to work after a kid – savings give you the ability to make decisions based on wider factors.

Like the financial lessons my dad taught me, I want Toddler L to have this appreciation for money and focus on saving. As she gets older, this is something I plan to actively teach her so that she can save for the future. For the moment though, it’s down to the missus and I to do what we can to build up her nest egg – after all, sending toddlers to work is frowned upon by the authorities. To date, we’ve opened a high interest regular saver where we transfer money each month, plus have a savings account for when she gets money from grandparents etc. We could probably do more though.

Rare footage of Mr Burns as a toddler counting his money has been discovered – “Excellent”

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As the current tax year is about to end, something we’ve been considering is opening a Junior Investments Savings Account (JISA) to make use of this year’s £4,080 allowance. Much like standard adult ISAs, these allow you to invest and save money with the added tax benefits (just remember that this does depend on your individual circumstances and may change over time).

The difference with the JISA is that it’s designed for under-18s and invested savings are ‘locked’ until their 18th birthday. As such, this feels like a great way to save for those big things in the future, such as a car, Uni or house deposit. Money can’t be spent if it can’t be accessed.

One of the companies we’ve been looking at is Orbis Access and their Junior Stocks and Shares ISA. I quite like Orbis Access’ current offer, namely them matching the first investment up to £100 if you open a new JISA or transfer from an existing JISA / Child Trust Fund (CTF) before 30th April 2017.

What’s more, there’s no management fees on any money invested in the first 12 months of opening the account. This means that the money remains invested fee-free until their 18th birthday. Obviously though, there’s a risk that the investment could go down as well as up so you may end up with less than what you put in, meaning that your capital is at risk.

As well as specific saving accounts such as these, I think it’s important to make your money go as far as it can and to be aware of what you spend it on. Things like discount codes, meal planning, selling unwanted items, travelling off-season, shopping around etc all help in the long run. As a parent, it’s not really about me now – it’s about Toddler L. Although it might be my money – or technically the missus’ as she’s the full time worker – we’re happy to forgo certain luxuries if it means that more money is available for the future.

With that £231,843 figure still floating around in my head, I’m going to check down the back of the sofa. Wish me luck! Are you saving for your kid’s future? Are you worried financially about the expected – and unexpected – costs on the horizon? Let me know below!

Disclosure: this post was produced in collaboration with Orbis Access and has been approved for issue in the United Kingdom by Orbis Access (UK) Limited which is authorised and regulated by the Financial Conduct Authority.