Rearing children is a costly affair: tuition, student accommodation, driving licence, their first moped or car, and so on. That’s why it’s best to start saving as early as possible. How much should you save and for what purpose? And what savings opportunities do you have?
Why you should save for the next generation
There are plenty of reasons why it’s best to start saving for your child’s future as early as possible.
1. Saving for a purpose
First they start crawling, then they learn how to walk and run, and before you know it, your child needs their first bicycle. Fast forward a few years and they want a moped. And once they turn 18, they’ll want to start taking driving lessons and get their first car.
2. Saving for the future
Of course you’d love for your children to keep living at home as long as possible, but there will come a day when they leave the nest. And when they do, you want to be able to support them financially, either to buy a home or to start a business, in which case some starting capital will be more than welcome.
3. Saving for unforeseen expenses
It’s also wise to start accumulating a savings reserve, for example to be able to afford to let your child go on an expensive study tour or perhaps even to let them study abroad.
How much should I save for my child’s future?
What do parents usually save for? A few examples
- Research has shown that parents primarily save as a precaution or to have a cushion for unforeseen financial circumstances.
- Many parents save to cover major purchases or expenses, such as a wedding, a car or to decorate their home.
- Another reason people often save is to accumulate assets for later in life. In any case, the most common reason for saving is to build financial security for a rainy day.
How to build up savings for your child’s future
1. When the baby is born
Many parents already open a savings account before their child is born, so they can start saving early for their child’s future.
Discover the benefits
2. Savings book
The old savings book is still an attractive way to save for the next generation. Despite the low interest rates, many parents and grandparents still prefer this traditional way of saving, because it is simple and secure.
3. Investing in the stock market
If you’re interested in generating income from your savings and you have a sum of money tucked away for a rainy day, you might consider investing. It’s best to start as soon as possible, as investing is a long-term commitment. With a KBC Investment Plan, you can invest with as little as 25 euros and at your own pace without having to follow the stock market’s every move.
4. Buying student accommodation or a home
In the longer term, buying student accommodation or a home for your child can be a lucrative property investment. Real estate usually increases in value, making it a good long-term investment.
What is a simple savings option?
1. Automatic savings facility
An automatic savings facility is an easy way to build up a tidy capital sum. You decide when and how much you save, which makes it easier to reach your savings goal.
Discover the other benefits of an automatic savings facility
2. Set some money aside every payday
This is a better way of saving than overdrawing your current account, because this means you will have to pay debit interest, which is higher than the interest you receive on a savings account.