16:24 27 February 2013
One of the many lessons I was taught was the importance of having money set aside for the future. We didn’t have a lot back then, but he made sure we understood the value of a pound. Junior ISAs provide a way for kids 18 years old and younger to learn how to save and the benefits one can gain from doing so.
Junior ISAs, or individual savings accounts, have an allowance of £3,000 that can be set aside each year without the penalty of taxation. Once they turn 18 the funds can be accessed, or they can continue to save and build a huge savings over the years.
Junior ISAs are perfect for college or university savings and can greatly reduce the ever increasing cost of post-secondary education. They are also perfect for various other uses like saving for a car upon graduation from high school. This can actually be used as a motivator if you add performance expectations that have to be met before the funds can be used. The allowance can be met by contributing less than £60 weekly.
It is most unfortunate that adults usually don’t take time to teach their children about saving money at an early age. By the time they graduate from college they are already in debt and have to go to work just to survive from day to day. By that time many years of saving potential have already been lost and the race to being broke at retirement is on. What a way to go.
If we start teaching our kids about saving as soon as possible it will allow them to be better prepared for those important times in life like education, marriage, the birth of their children and ultimately retirement. ISAs are the perfect mechanism to begin teaching them lessons that will remain with them forever.
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