A parent’s guide to creating a secure future for adult children
Every parent wants to see their child succeed. While you don’t have complete control over the way your child’s life turns out, there are some things you can do throughout the years to set them up for the best possible chance of success. This guide will show you the most effective ways to secure a good financial future for your adult children.
First and foremost: Be smart with your own money
You must be smart with your own money if you want to teach your adult children how to secure their own futures. Make it your mission to pass on good financial skills, and be sure to have your own savings so that, when you are no longer around, there’s money to be passed on.
If you have yet to invest in life insurance, now is the time to do so. An over 50s plan is a great option, as there’s guaranteed acceptance and you only need to pay a set amount each month to ensure you leave your adult children money. Don’t forget to compare plans, as the best life insurance for over 50s UK differs depending on family circumstances.
Have a dedicated savings account for your kids
When your kids are still growing up, it helps to have a dedicated savings account just for them. Over the years, put some money aside into this account. It will build up over the years, which means, when they are an adult, they’ll have a lump sum of money to help them get started.
Establish a trust
If you are not around to ensure your adult children receive the right assets from you, you can rely on a trust. A trust is essentially a legal agreement that involves a settlor (you), a trustee (the person managing the trust), and the beneficiary (your child/children).
It’s a tight legal agreement where the trustee manages the assets specifically in line with what you, the settlor, have set in terms. It means you get more of a say about how and when your adult children receive certain funds – for example, you may prefer the trustee to hold onto certain funds until your adult children are at an older age, when they may be more financially literate.
Education, education, education
Bring your children into financial-related discussions. If you want your adult children to be set up financially, you need to educate them on how to handle money. There are several ways you can do this, including:
- Giving an allowance based on chores
- Discussing money with them
- Opening a bank account for them
- Telling them about your own financial mistakes
- Setting them up with a financial advisor
Let them make bad choices
This one is arguably the hardest step. It’s difficult to watch your children, no matter how old they are, make mistakes without intervening. However, if you never let them make errors in their life, they won’t learn from them. So, step back from time to time by allowing them to understand how wrong choices affect them. With these lessons under their belt, they are more likely to become financially literate and secure in their future.
