I’ve saved £450 for my kids by putting aside just £1 a week – how you can too

STARTING with small amounts when saving can really add up, as mum-of-two Michelle Dickson has discovered.

Michelle, 40, has stashed away more than £450 for her two sons – and she started out with just £1 a week.

Michelle, from Weston-Super-Mare, hopes she can save enough for her sons Liam, 9, and Benjamin, 7, to put towards the cost of a car, university or gap year in the future.

But like many parents, she doesn’t have oodles of spare cash to put aside.

So she and her husband, Gareth, decided to use an app to help them save small, regular amounts and try to get her kids into good money habits at a young age.

Michelle, 40, said: “I was keen to save a small amount each month for my kids’ future, despite the rising cost of living.

“I feel as though the cost of living crisis is going to impact our kids more and more, so helping them out a little is the least I can do.”

Here are her top tips for saving for your children:

Set up a kids account

Michelle set up a Go Henry account for each of her sons. She transfers £1 a week in pocket money to each of them, and puts £20 a month in a Junior Isa too.

A Junior Isa is a tax-free savings account – parents and relatives can stash up to £9,000 a year away for kids, who won’t be able to access the cash until they turn 18.

That makes it a good option for long-term savings – and the account turns into an adult Isa when they reach age 18, so they can keep saving for themselves.

Michelle said: “I’ve never even had an Isa for myself, but I wanted to start saving for the boys.

“The app lets them set savings goals and complete money missions, that teach them about different finance topics.

“I only found out the missions existed when Liam came over and started explaining about debt to me one day.”

GoHenry is popular because it’s easy to use and offers a pre-paid debit card to let kids spend their pocket money. But it does charge a fee of £2.99 a month per child.

Plenty of banks let you set up a kids account free of charge including Barclays, Halifax and Lloyds.

If you want a pre-paid card, HyperJar’s is free – although it can’t be used at ATMs. Parents can set limits for different retailers and types of spending.

NatWest Rooster Money and Nimbl both charge £1.99 a month.

Get into good habits

Experts say that the earlier you start teaching your kids about money, the easier it is to instil good habits for the future.

And Michelle said her sons are already more savvy than she is: “Ben set a goal in the app to save up for some roller skates he wanted.

“They cost around £50 and he was worried about how much his balance went down after the purchase.

“But I’m trying to teach them that it’s good to save, but you should treat yourself too.”

Michelle used to set money aside in her own savings account for Liam and Ben, but said she thinks it’s more motivating for them to watch the money grow in their own accounts.

Michelle said: “I set chores and tasks – from ‘clean up your bedroom’ to be kind to your brother’ – and they can earn extra pocket money when they tick them off.

“Liam has set up his account to donate 5p to charity for every £1 he earns in pocket money.”

Get the family involved

Ask relatives to contribute to kids’ savings account at birthdays and Christmas instead of buying toys or vouchers.

Liam and Ben each now have more than £230 in their accounts.

One of the major perks about children’s savings accounts is that they have better interest rates than adult versions – this means their money can grow at a faster rate.

HSBC pays interest of 3.25% on balances up to £3,000 through its HSBC MySavings account – but kids need to be at least seven years old to get the account.

Kent Reliance offers 3.05% up to £25,000 on its Demelza account, which can be opened before their first birthday. It doesn’t offer a debit card though.

Santander‘s 123 Mini Account pays 3% on balances between £1,500 and £2,000 – the interest rate isn’t as generous if you have less in the account though.

Consider investing

Investing is ideal for young children because there is plenty of time for their money to grow.

When you invest money in the stock market it has the potential to grow at a faster rate than it will in a standard savings account.

Of course, investing is risky and there is a chance the value of your cash could fall – but experts say if you stick with it for the long term, it’s safer because your money has time to recover if there is a dip in the stock market.

These days, apps make it super easy too. Many will ask you to fill in a short questionnaire about how much risk you are willing to take and then pick your investments for you.

Michelle said: “I don’t even invest for myself – but I think sometimes you put more effort in for your kids.

“I don’t know what their life path will be, but I hope the money will give them a little head start in whatever they want to do.”