With such busy lives, finances may be the last thing parents want to think about.
Money considerations can also trigger tricky conversations, such as what would happen if one — or both, if you’re in a relationship — were to die.
But by getting some key products in place and making sure you’re on track for the future, you’ll at least have some peace of mind.
If you’ve deferred financial administration, it may be easier than you think. Here are some of the basics parents might want to make sure they’ve covered…
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown (HL, hl.co.uk) suggests that people should generally aim for emergency savings to cover three to six months of essential expenses for anyone they are financially responsible for, in a competitive and easy way. access the account.
Research by HL/Oxford Economics found that 73% of people had at least three months of essential spending on emergency savings, but that figure fell to 68% for parents and 41% for single parents.
Coles suggests setting up a direct debit by putting money in a savings account on payday, before you have a chance to spend it.
She adds, “You may also want to consider some of the savings tips that may be offered through your current account or a standalone app. These can, for example, round up each purchase and place the excess in a savings account – to help you save without noticing.
“You don’t need to put a huge sum aside to make a big difference,” says Coles, the average regular saver putting £87 a month into an HL Junior Isa (also known as Jisa).
Of course, that won’t be possible for many families – especially with the cost of living so high right now – but any amount you can manage will be worth it in the long run, and it’s not. need to be every month.
Coles adds, “You don’t have to do it alone either. Of our current Jisa holders, a third are paid by more than one adult. Grandparents are often eager to do something for their grandchildren, so they might be happy to contribute with regular payments. If they aren’t ready to make monthly payments, family members might be happy to hand over money for things like birthday and Christmas gifts.
“You can set up an online Jisa and arrange direct debit to pay regular monthly amounts into it.”
When a child turns 18, his Jisa will become an adult Isa and he will be able to access the money. Coles says, “Over 90% of HL Jisa clients still have money invested a year later.” As the fund grows, they can develop a sense of ownership over it, realizing “that by continuing to invest, they can continue to benefit from it throughout their lives”.
“When you have children, it’s important to think about what would happen to you if both of your parents died and include details about who you would like to be the guardian of,” Coles says.
To help make the process simple, she adds, “Be sure to speak with the person you appoint ahead of time, so they understand what you’re asking of them and have a chance to determine if they’re ready to go. ‘to assume.”
And if you have more children, “you will have to check that your will is up to date”, taking everyone into account.
Alistair McQueen, head of savings and retirement at Aviva (aviva.co.uk), says people can get a free state pension forecast online to help estimate their entitlements.
McQueen adds: “After that, we should then understand how much private savings we have accumulated in private pensions to date, if any, and we should also clarify how much we are currently adding each month, including any money from our employer.
“If you think you may have lost track of a previous pension, the government has a free pension finder service to help you.
“And finally, with this information, we should be able to estimate the retirement income that we are currently on track to achieve when we retire.”
If your own retirement savings are on track, you might even consider starting a child’s annuity. McQueen says, “A child is unlikely to get their hands on these gifts until they are 50 or 60 years old. However, as with any savings goal, the earlier you start, the greater the benefit of compounding returns. »
Insurance supports you and your family when you need it most.
Graeme Trudgill, executive director of the British Insurance Brokers’ Association (Biba, biba.org.uk) says families should think about a variety of policies – including home, travel, car and life insurance, income protection and critical illness cover.
Some households may find it more difficult to find shelter if they do not fit a ‘standard’ profile, for example, if their area is prone to flooding. The specialized directories on the Biba website can make it easier to find suitable cover.
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