Saving for children made simple
We look at one way you can really save for your children - with Round Ups. Saving without thinking. Read on to find out how.
Saving for your children's future
Let’s talk about money, and before you dash off at the speed of light because the mere mention of the ‘m’ word gives you the sweats, read this first. It might just change your children’s future if you do. We are pretty sure we’ve found the next big thing to help you be super smart with your cash for your kids, without having to give up or give in to anything in the process.
Money has never been my strong point. I’m the sort of person that never knows quite how much I have in my bank account, would prefer to stick my head in the sand when it comes to how much things cost, and try not to think about how much I could be saving when I buy something I don’t necessarily need.
But having kids has forced me to think differently. Like all parents, I only want the best for my three girls. However, planning for your children’s future is a daunting task, particularly when it comes to money. This is why the Beanstalk App has become a fixture on the home-screen of my phone as it is without doubt the best solution I’ve come across to what is otherwise a tricky problem to solve.
What is Beanstalk?
The Beanstalk App is a new way of saving money for your kids, without any commitment, pressure or in my case, guilt. You essentially download the app from either the App Store or Play Store and open a Stocks & Shares Junior ISA for each of your kids and can shimmy money, big or small, into their account as and when you feel like it. Tools like Round ups allow you to save little & often, whether it is 10p, £10 or £100, every little adds up and over time, the total they have grows.
You can also invite family to contribute and earn money back on your shopping at top retailers via the app. We’ll look at some of Beanstalk’s other tools in another article. Beanstalk won the Good Money Guide’s best Stocks & Shares Junior ISA 2022 and is shortlisted for Moneyfacts Consumer Choice award, 2023.
How much do you need to save?
Well, like anything that involves money, it will always be personal. Being the sceptic that I am, I wanted to know how it works and how much I’d really need to save for my seven year old to have a decent lump sum to do something with when she was 18. That is eleven years away, or 2033 to be exact.
Instantly I assumed the worst, that I’d find it overwhelming, depressing or both. I used the Beanstalk App calculator to work out that if I saved £1 per day or around £30 a month, she would have over £5000 by the time she was 18. I was astounded, and cursed myself for not starting sooner.
The calculator assumes a 5% annual growth in the Shares fund that’s offered through the app. As with any investment the value can go down as well as up.
Why does saving for the future matter?
It hit me that saving this money could make such a difference to her life, just as she is starting out as an adult. Whether it is buying her first car, putting it towards a gap year or going to university. Life isn’t going to get any cheaper when she leaves home - I’m in no doubt about that. So the steps I take now really will make life easier in the future, for both of us.
But it was also a wake up call too. One day she’ll want to move out and buy her first home. I was lucky enough to buy a home with my husband when housing was a whole lot cheaper than it is now and banks weren’t so fussed about you having a small deposit. I doubt she’ll be so lucky, and so good financial planning for this part of her life feels essential.
How to Round Up your spending
And this brings me to the best feature of the Beanstalk App for someone like me who cares a great deal but isn’t so great with financial planning. The Round Ups tool is a super clever feature that literally rounds up the change from your purchases and places it securely in your children’s savings accounts. So, say you bought a lunchtime meal deal for £3.50, you could round up the purchase so that 50p goes into savings.
So does it really add up?
Well, let’s play it out. If you bought a meal deal at £3.50 once a week for a year (mine’s a chicken salad sandwich, salt and vinegar crisps and a Diet Coke if you must know), that would be 52 payments of £3.50 that you would make, and if you chose to round up to the nearest pound each time you spent your cash, you’d save £26 per year. Obviously if you had more purchases to round up you can save more.
The real value of Round Ups
Any round ups you make will be split between all the Beanstalk accounts you are linked to unless you state otherwise. For example: if you have 2 children and an account for yourself and you round up £5, each will receive £1.66 (with 1p left over!)
You can also turn on ‘auto round up’ or go into the Beanstalk app on your phone and choose which payments you want to round-up by simply ‘swiping’ the transaction. You can even adjust that week’s total round ups.
If you decide that you have set Round Ups too high or want to change it at any point, it's only a few clicks in the app to re-set the amount. We all have good months and bad months and so this sort of flexibility is ideal.
For tired parents everywhere…
The Round Ups tool for me, is a game changer. I’m a tired parent with a newborn baby and two primary school aged kids. Some days I feel like I’m winning but more often than not, I’m winging it and it is a miracle if anyone in the house has clean socks or there is enough milk in the fridge for breakfast.
Round Ups makes me feel like I’m winning with my money, silently alongside the daily chaos. And on occasion has also helped me to justify buying something that is less essential, knowing the change will go to a good home. I’ve somehow told myself that buying a new eyeliner, pair of trainers or fancy bath salts will help my kids afford their first flat. And if that isn’t a motivator, I really don’t know what is!
If you would like to download Beanstalk, you can do so here:
This is a collaborative post with Beanstalk. As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice. Beanstalk is a trading name of KidStart Limited, authorised and regulated by the Financial Conduct Authority