Securing the financial future of your children

This is a guest post by FCA registered broker Reassured

As a mum, there is nothing more important in life than the wellbeing of our children. With living costs rising at a rapid rate, it’s more important than ever to prepare for your children's financial future.

This financial stability can be broken down into 3 stages of life; childhood, adulthood and the unexpected.

1) For their childhood

Ultimately, the financial security of your children whilst they are young is dependent on how financially stable you are.

They rely on you to keep a roof over their head, pay the household bills and keep the cupboards stocked.

Teaching them about money will help your child to understand it's worth and aid them towards being financially independent in later life.

The best way to secure the financial well-being of your child when they are young is to ensure you have enough savings to cover unexpected costs.

This may sound unrealistic, but putting away 10-15% of your monthly paycheck (if possible) can build up quickly and offer a buffer when unexpected costs arise.

2) For adulthood

Even when your child is young, it is a good idea to begin saving for their adult life.

Opening a Junior ISA will allow you to put away money for your child which they can then access at 18 (and not before).

This means that when they enter adult life, they already have a pot of money that they can use for what they wish.

This is a great way of working towards their financial security as an adult. The money can be used to buy their first car, as a deposit for their first house or even to help start a family of their own.

3) For the unexpected

Unfortunately, nothing in life is certain and it is for this reason that it is important to put in place precautions. This ensures that if the worst were to happen to you, your loved ones would not be left with a crippling financial burden.

Dependent children

As previously mentioned, dependent children rely on you to fund their entire life from their home to their lifestyle.

For this reason, if you were not around, your child may be left having to move out of the family home or undergo a complete lifestyle change.

Taking out adequate life insurance cover can ensure that if you were to die, your children would receive a lump sum pay out to cover the mortgage or fund their existing lifestyle.

If you are in good health and still relatively young you could secure life cover for just 20p-a-day.

Whilst the emotional void of losing a mother can NEVER be filled, the financial fallout can at least be minimised.

Life insurance for mums infographic 2018

Independent children

Even when your children are fully independent, it is still possible to burden them financially if you were no longer around.

The average funeral in the UK costs over £4,000 which is not an easy feat for most. In fact, the total cost of dying, according to insurer SunLife, is over £8,000. This often leaves people having to borrow money, take out loans or even sell personal belongings.

To avoid burdening your children with this responsibility, taking out a life insurance policy or funeral plan can ensure all costs associated with your death are covered.

Equally, any unpaid debt (including your mortgage) will fall to your loved ones. Therefore, adequate life insurance can ensure that these are covered and your children are not left to pick up the bill.

Financial security for all stages

It is possible to financially secure your child throughout all periods of their life from childhood, through adulthood and even when you are no longer around.
  • Teaching your children about money will help them gain an understanding of its value
  • Putting away some of your monthly income will help to cover unexpected costs
  • Putting money into a Junior ISA for your child will provide them with a good financial footing when they turn 18
  • Securing adequate life insurance can ensure the financial stability of your children (whether young or fully grown).

- collaborative post. 

1 comment

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