Saving for the children

Saving and dealing with money are skills that children should learn early on. Financial education is an important part of upbringing and can be groundbreaking for the relationship to money in adulthood. How can you optimally prepare your children and give them an additional jump-start into adult life?

Saving and dealing with money are skills that children should learn early on. Financial education is an important part of education and can be groundbreaking for the relationship to money in adulthood. Another aspect of financial education for children is that they learn how to manage their money and provide for emergencies. By learning early on how to divide their money into different categories, they will be better able to deal with unexpected expenses and difficult financial situations later in life, or make financial decisions based on sound reasoning rather than impulses or short-term desires. It can also help children develop a better understanding of the value of work and the importance of saving. Set savings goals with your children or help to create a Budgets. Then it's all the more fun for him to buy a "Batzeli" or the Pocket money spend it independently on small wishes or fulfil a long-cherished wish with their own savings. Also, talk openly about money at home, so children also get an important insight.

How can you support your children so that they already have a financial cushion in young adulthood for their first flat, a longer trip or a semester abroad? For example, with a monthly payment from birth, for a certain amount, however small, into a separate account. Whether this is in the name of the child or in the name of the parents depends on whether your child is allowed to freely dispose of these savings at the age of 18 or whether you would like to postpone the date of withdrawal for a while.

Due to the very long investment horizon, it makes sense not only to deposit the money in the savings account, but also to invest it. The following examples show what assets can possibly be built up until the 18th birthday or beyond, depending on the monthly savings amounts.

Due to the investment horizon, a dynamic strategy was chosen for the calculation, with around 50% shares, 40% bonds, the rest real estate, money market and commodities. Taxes or fees were not taken into account. With such a duration, however, a strategy with a higher share of equities would also be justifiable.

With the long investment horizon, the still enormously underestimated compound interest can also unfold in all its glory. Comparison of savings accounts: With an interest rate of 1.0 % at age 30 and a monthly payment of CHF 200, only CHF 83,955 would have accumulated in the savings account. Average annual inflation in Switzerland in 2022 was 2.8% (BfS).

Many of us associate saving with doing without, but how big is the sacrifice actually when we look at the figures above? Even with a small but regular amount, you can help your child to get a start-up capital and encourage the motivation to save on their own. As well as setting the course for financial possibilities and a certain independence at an early age. Or to put it in the words of the orderer author Robert T. Kiyosaki of Rich Dad Poor Dad to express: "Why do the rich stay rich and the poor stay poor? Because the rich teach their children how to handle money, and the others don't!" Incidentally, even if you only start saving at the age of 25, a considerable amount can be accumulated over the next 30 years with small deposits.

How your financial planner can help you with this?

Your Financial planner is able to draw your attention to various aspects, including the topic of savings, in the sense of holistic planning. Taking your personal situation into account, possible solutions are pointed out and detailed information is given on the advantages and disadvantages of the many products on the market.