We all want the best for our children and know the bottomless pit we’ve thrown our money into over the years trying to give them every opportunity. But this commitment naturally does not end as they turn 18 and reach adulthood – if anything the financial support they need increases as they think about university, getting a car or simply enjoying everyday life that needs more than a trip to a National Trust for a walk and ice-cream to keep them happy
Hopefully they’ll be proactive and get a job to support themselves as much as possible but I wanted to provide my 2 children with a helping hand. My objective, to give them both £10k when they turn 18.
So what is my plan?
My £10k plan was not something I’d decided on until 5 years ago so how was I going to ever achieve this goal without making massive deposits each month? I’m not capable of just opening my wallet and handing over a big wad of cash on their 18th birthday.
The method I chose was a Junior ISA. I got the calculator out and worked out how many months there were left until my children turned 18 (one is 3 years younger than the other) and rather conveniently it came out to some nice round numbers. The youngest needed me to deposit £100 a month and the eldest (with 36 less monthly payments) needed £150 a month for me to have invested £10,000 for each of them. I set up a monthly savings plan accordingly with my JISA provider (who don’t charge any service fees on JISAs handily) and just let it do it’s thing.
Is my JISA plan on track?
Now, it is important to note that with a Junior ISA you’re investing in markets that go up and down all the time so the capital you put in can go down as well as up. Basically, you may get back less than you put in (though only if you cash-out whilst down). How well you do will also depend on what you invested in so please note that this is just my experience and the situation at the time of writing this. If I write another article titled “How I lost my children’s money” you know what happened 🙂
Well, with 17 months of payments left until my eldest child’s JISA matures it’s made an impressive 27% return and already reached the £10k target….yes, that surprised me too! Maybe I was just lucky in what investments (I chose 4 actively managed funds targeting different regions) but hopefully it’ll continue on this positive trajectory and give them much more of a helping hand than I originally hoped.
My younger child has the exact same 4 funds and therefore the same 27% return. They have less invested at moment due to the lower monthly payments, but they have more time on their side for it to grow. It will be interesting to see who ends up with more when their one also finally matures (one to to keep you posted on in a few years)
