World Children’s Day on 20th November commemorates the adoption of the Declaration of the Rights of the Child by the United Nations in 1959. In today’s unpredictable world, every parent wants to equip their child for a stable and successful future. Here are eight simple yet impactful steps to help you start building a secure financial foundation that will allow your child to thrive, no matter what tomorrow brings.
World Children’s Day: Eight easy ways to build a better financial future for your child
It’s a tough old world out there but you can take action today to start building your child a more secure financial future. We’ve come up with eight easy-to-implement ideas to get cracking on this important financial goal:
Set up a savings or investment account
It’s never too early to teach your child the value of saving. Open a junior savings account for them and encourage them to save. You can give them a helping hand with automated regular contributions from parents or grandparents if finances allow. Establishing this habit early will help children learn the power of consistency and compound interest over time.
Make use of government-supported savings incentives
Many countries offer incentives for children to save such as the UK’s Junior ISA scheme, which gives £9,000 of tax-free saving (2024-2025 tax year), although the child must be resident in the UK.
It’s worth researching what is available wherever you are resident. In Malaysia, for example, parents who are Malaysian citizens can contribute to the SSPN (Skim Simpanan Pendidikan Nasional), a government-supported education savings scheme for Malaysian children, managed by the National Higher Education Fund Corporation (PTPTN). Savings into this scheme benefit from tax relief and earn annual dividends on funds intended for education-related expenses.
Encourage goal-based saving
No matter their age, children want stuff! Whether they are hankering for a new Lego set, must-have trainers or some Air pods, helping them save for specific items teaches them the value of setting and achieving goals. Consider matching their contributions to encourage their savings habit and reinforce positive outcomes.
Teach them the basics of investing
Even very young children can be introduced to the basics of investing. Too few adults understand the concepts of interest, compound interest and debt and this is a major contributing factor to skyrocketing personal debt. Understanding these financial basics can promote healthy habits such as saving before spending and favouring good debt over bad.
In addition, teens can be introduced to the basics of stocks, bonds, and mutual funds. Some banks or financial apps even offer kid-friendly investing tools that allow them to buy fractional shares with small sums, which can be a fun way to learn. Starting early with investing can prepare them to make informed financial decisions as adults.
Model financial literacy at home
Children learn by example, so let them observe your financial habits in action. Whether you’re budgeting, investing, or making a large purchase, involve them in age-appropriate ways to demystify how money management works in real life.
An example might be taking your child along when you’re on the hunt for a new car to understand how to see through marketing gimmicks, negotiate prices and understand the factors to consider when taking out a car loan or leasing agreement.
Add them as an authorised user on a credit card
Adding a teenager as an authorised credit card user (where possible) can help them build a positive credit history early on. This also enables you to teach them how to use credit responsibly in a managed way before they have to do it solo.
Introduce charitable giving
Right now the world desperately needs more financially conscious and empathetic adults. You can cultivate these traits in your child early by encouraging them to donate a portion of their savings to a cause that is close to their heart.
Start an education fee fund
This could be the most impactful of all the suggestions here in terms of future financial security. Recent research in the US demonstrated a clear correlation between degree attainment and higher net lifetime earnings. The earnings premium for those with an undergraduate degree was $ 1 million, rising to $ 1.7 million for a postgraduate degree.
The economic benefits of a degree are clear, not to mention the non-financial advantages, including increased self-confidence, better physical and mental health and greater civic engagement, however all that comes at a price.
A degree in the UK costs a minimum of £9,250 per year (home fees), rising to £9,535 from September 2025. That doesn’t account for accommodation and living costs. Top-flight universities in the US will be even more.
Parents can plan ahead to ease the burden of a university education for themselves and their offspring. Starting an education fee plan as early as possible is an incredible gift to offer your child. It means that you can spread the cost over a number of years and benefit from compound interest to boost your savings. Save enough and you’ll enable them to graduate debt-free.
Our highly experienced financial planners can help you with regular savings planning to build capital for your child’s university education. They understand the challenges and concerns of expatriate parents and can advise on products aligned with your needs.
If you’d like to give your child a bright, debt-free start in life, please do get in touch for a chat.
Whatever the future has in store, all of the suggestions here will help lay a foundation for financial security to enable your child to thrive throughout their life.
A leading provider of expat financial services and wealth management services across Asia.
