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Like basically all kids,I received pocket money from my parents each week in return for helping out around the house – my specific remit being the nightly feeding of the chickens,and occasionally hanging out the washing.
Both me and my sister’s weekly earnings were displayed on the fridge whiteboard,and paid to us as cold hard cash for us to do what we liked with.
Real Money kids saving money childrenAresna Villanueva
At the ripe old age of 12 you can bet any thoughts about saving that money went completely out the window (or more accurately,to the discount video game bin at Video Ezy) and I think most other kids would be the same.
So it’s no surprise that parents often take matters into their own hands when it comes to putting some money aside for their kids,with 71 per cent of parents they try to save towards their children’s futures. This can be for a number of reasons but is often done to help kids onto the property ladder – surprise,surprise.
What’s the problem?
However,saving on behalf of your children isn’t the easiest thing in the world,especially if you want to get the most bang for your buck. Investing in the name of someone under the age of 18 can incur tax rates of a whopping 66 per cent for every dollar interest earned over $416 each financial year. In the case of shares,property and other assets,investing in your name and gifting them once they turn 18 can leave you with a hefty capital gains tax bill.
What you can do about it
If you’re thinking about the best way to put some money aside for your offspring,here are a few strategies:
Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.