Saving money for your children can be pretty difficult at the best of times. But, throwing a divorce into the mix can make it all that much harder.
Plus, when coupled with the ongoing cost of living crisis, the fallout from the pandemic and the recent energy bill hikes, it’s no wonder so many divorced parents are now looking for advice on the best ways to save money – and not just for their kids.
Recent statistics show that 42% of UK adults – both divorced and non-divorced – have either significantly reduced or stopped any kind of regular savings, while research from 2021 also found that almost a fifth of UK adults had less than £100 in savings.
These are particularly worrying trends when you consider the impact they could have on your children; without saving for their future, this could seriously hinder the school, jobs and career prospects they’ll have in later life.
But, what exactly can you do to buck these trends and ensure your children have a financially-secure future?
Well, whether you’re newly divorced, in the process of divorce, or have been separated for a long time, we’ve got you covered.
While you may think you’ll struggle to save anything on your own, join us as we prove you otherwise, running through some of the best ways to save even just a little bit each month.
Communicate Openly with Your Ex-Partner
While it may sound obvious, the more you can maintain effective communication with your ex-partner, the easier it will be for you to both agree on the best way to save for their future. But, we know this isn’t always easy.
Whether it be disputes over schooling, changes to the child’s surname or dealing with grandparent contact, there are a number of legalities and tricky issues to consider when going through a divorce with a child involved, all of which can cause communication to break down.
It’s important to remember though that the child comes first. Just because you and your partner have agreed to separate doesn’t mean that they should be caught up in the crossfire.
Instead, you should make life as easy as possible for them, by acting amicably with one another and communicating effectively to agree on the best financial arrangement.
Create a Budget
While on the topic of reaching a financial arrangement with your ex-partner, it’s important to create a budget so you can keep on top of what you can and can’t afford. Then, once you’ve got this in place, stick to it.
While the cost of utilities may be sky-high at the moment, having an overview of your monthly ingoings and outgoings will give you a much better idea of how much you can realistically afford to save on behalf of your children.
Plus, in doing so, you will be able to more easily identify any direct debits or fixed cost payments that you can potentially get rid of, helping you prioritise putting a bit of extra money towards what matters most: your children’s future.
Utilise Round-Up Services
Another quick and easy way to save money for your children comes through using the round-up services that many major banks now offer, including our app Beanstalk.
Say, for instance, you purchase a cup of coffee daily for £2.50. By rounding this up to £3, the extra 50p will be instantly added to a savings pot for either you or your children.
While it may take some time to save anything meaningful, these extra little bits of money can really add up over time, creating a handsome pot of money for your children to have available to them when they reach adulthood.
Going back to our coffee example, for instance, over the course of a year, those extra 50ps will add up to £182.50 from coffee purchases alone!
Open an account for your child’s savings
There are many different types of accounts to save for your children from Junior ISAs, to bank and building society accounts to Premium Bonds, then mix in cash or stocks and shares and the options can be confusing.
This is part of the reason we launched Beanstalk*, which is our easy to use Junior ISA and adult ISA app that makes it simple for all parents to save for themselves and their kids. Beanstalk is a handy app for divorced parents as one parent is the primary name on the account but they can invite the other parent who is then able to have access to all the tools on Beanstalk and contribute to their child’s savings directly from their own app, making the saving process smoother than some traditional methods that may require trips to the bank.
Junior ISAs are popular as they are tax free and ‘locked’ until the child turns 18 giving you full control until up until this point, before they turn into an adult ISA when your child reaches adulthood. If you would like to learn more about Junior ISAs you can download our free Introduction to JISA Guide.
Sign up to KidStart
KidStart is a loyalty programme for parents designed by parents, that enables you and other family members to earn money back on their online purchases for their children’s savings.
Thanks to our relationships with more than 2,000 well-known retailers, including Boots, eBay, Argos and John Lewis, our platform enables you to get something back when shopping online, delivering a specific percentage of savings from the purchases you make.
Say, for instance, you decide to book a holiday for you and your family through Expedia. Booking this via the KidStart platform will give you back up to 8% in savings into your child’s savings account, seamlessly allowing you to save without affecting your bank balance.
For further information about how the process works, simply click here.
Please note: *Capital at risk. With any investment the value may go up as well as down.