Saving for your Child’s Future

Having children isn’t cheap these days, especially in the long term – the older they get, the more they cost. Higher education prices continue to soar and it’s almost impossible to get onto the housing market without having some capital or homeowner loans. All of these things may seem so far ahead, especially if your child is very young, but now’s the time to start saving to ensure you can provide what your children need further down the line.

Surveys suggest that we’re starting to realise this. A report published by Mintel in October 2005 found that 75% of British parents with children under 14 are now saving for their children’s futures. Nearly six million parents are now saving for their children, compared to just under five million in 2003. So it’s evident that we understand the need to save, but it’s not always easy to do so. The day-to-day family finances can be difficult enough to manage without having to think about the future. This article provides some information on how to save for children and explains some of the financial products available.

Bank accounts

The first step that most parents take towards saving for their children is to open a savings account on their behalf and start making cash deposits. Most banks and building societies have accounts specially tailored for children. They often have a higher rate of interest and offer incentives such as membership of a kids’ savings club with regular newsletters, piggy banks, toys and badges. Even if you’re not sure how often you’ll be able to make deposits into the account, it’s a good idea to set one up as soon as possible after your child is born so that it’s there whenever you do have money to put aside. Try to get into the habit of putting in at least a small amount on a regular basis – setting up an automatic transfer from your bank account will make this much easier. Alternatively, simply depositing the government child benefit on a weekly basis will get you off to a good start – it’s amazing how quickly it builds up.

Tax

Children are subject to income tax on bank accounts just like adults. They receive a tax allowance and as long as their total income including interest doesn’t exceed this allowance in the financial year, they will not be taxed on their interest. (The allowance for 2006-2007 is £5,035.) However, this only applies when the savings are gifted by a relative or friend. Interest on money gifted by parents will be subject to tax if the amount of interest earned in a year exceeds £100 per parent. (This prevents parents from taking advantage of children’s accounts for their own savings.) If your child’s annual income will be less than their tax allowance and the money you give them in a year will amount to less than £100 in interest, you can fill out an R85 form from the Inland Revenue to apply to have the interest paid without tax being deducted. It may be worth opening separate bank accounts if your child will be receiving money from yourself as well as relatives or friends, to save any confusion.

Child trust funds

The introduction of child trust fund by the government in 2005 has made a big difference in helping parents to save for their children. In the scheme, new parents are given a minimum of £250 to invest in a long-term savings and investment account on their children’s behalf, plus a further £250 when the child turns seven. The proceeds are held in trust for them until their 18th birthday. It’s not subject to tax and up to £1,200 can be invested each year by parents, family or friends.
There are three types of account – a savings account, a shares account and a stakeholder account. The choice you make will depend to a great extent on your attitude towards risk. Savings accounts are the safest method as you won’t lose money this way, but the returns on the investment tend not to be very high.

The shares account invest your child’s money by purchasing stock market shares. Investing in shares can be risky, especially in the short term, although on the whole the stock market can produce a good long-term returns as share values tend to rise more than they fall over a long period. As saving for children is normally a long-term approach, shares accounts can be an attractive option. However, shares can go down as well as up at any time and past performance isn’t necessarily an indicator of future performance. It’s also important to note that the account provider will normally charge an annual fee for managing the shares.

The stakeholder account is a medium risk option, which invests in shares until the child turns 13 and then the money is transferred to lower risk investments and assets, helping to limit potential losses in the lead-up to the child’s 18th birthday. However, if the stock market performs well over this period, the returns won’t be as high as they would have been if the money had remained in the higher risk investments.

You’ll need to choose not only which account you want for your child, but also which provider. Various different banks, buildings societies and financial organisations provide approved child trust fund accounts. The government simply sends you a voucher for £250, which you’ll invest in the account and provider of your choice. All providers are of course regulated and must meet the terms and conditions stipulated by the government. However, there may be differences in the products they offer. Look out for fees charged and any requirements relating to how much you deposit and how frequently.

Other government-backed savings options

The National Savings and Investments Bank (formerly the Post Office Bank) is an agency of the Chancellor of the Exchequer. It was set up in 1861 by the Palmerston Government to help working people save for their futures and as a means of raising government funds for public spending. It offers various safe and secure options for saving. Premium Bonds, for example, are a monthly large-value prize draw in which you can enter anything from £100 to £30,000. The jackpot can be up to £1million, but prizes of between £50,000 and £100,000 can be won for every bond number held. The prizes are tax-free and bonds can be bought by parents, relatives or friends on behalf of children under 16. Alternatively, indexed linked savings certificates are a great method of tax-free saving in which the value of your money increases in line with inflation (linked to the Retail Prices Index) at guaranteed interest rates. Between £100 and £15,000 can be invested per issue, and they are available to anyone over the age of seven (or can be bought on a child’s behalf if they are under seven).

There are lots of other possibilities for saving for your children – investments, stocks and shares, bonds, savings accounts, trust funds – not all of which are specifically designed for children. In such cases, you’ll need to manage the money on the child’s behalf until they reach 18 (or sometimes 21). To find out how you can best provide for your child’s future, you should visit a financial advisor who will be able to outline the most suitable options for you and your family.

Benedict
http://www.articlesbase.com/mortgage-articles/saving-for-your-childs-future-62231.html

A Matter Of Becoming Still – Spirituality Information

When I was much younger, I thought that education would be the answer to all my problems, so I went about obtaining degrees. I collected a good number of them including a summa cum laude degree in chemistry and mathematics, and an MBA among others. But I found that my education, even though it helped tremendously, did not bring real satisfaction. So I put the certificates and diplomas in the bathroom under glass and wrote, “Break in Case of Emergency.”

Then I started working for Fortune 500 companies and became intrigued with those who frequented the boardrooms of power and fame. And though a part of me was fascinated, thrilled and even enjoyed the trappings of power, there was something that was missing, which I couldn’t put my finger on. My heart and spirit were crying out for something that I couldn’t find in major corporations.

Still searching for the “Holy Grail” I became an entrepreneur and built a very successful, multi-national business with offices in the United States, the Caribbean, Africa, India and the United Kingdom. Life seemed good. I traveled the world, wined and dined with leaders of industry and even leaders of countries. I was treated as a prince, but still it all felt empty and useless.

Wherever I sought for peace and prosperity and happiness, I’d find prosperity without the peace or I’d discover abundance without the happiness. Finally, one day, as I sat on my wife’s deathbed (she was only in her thirties when she died), it became clear to me that my happiness, peace and prosperity were not dependent on anything external, but on that which was within me,that which had always been with me from my very first day on Earth.

So I started to look within me and discovered a wonderland beyond imagination. I realized that the one spiritual practice more important than all the others that could bring me peace, happiness and prosperity was the practice of going into the “silence” deep within me. Some call it meditation or prayer, others refer to it as contemplation or centering oneself. I do not know what it should be called, but I think of it as the “silence”.

In the great silence within, I become renewed, refreshed and excited to face the physical world. When I return from my moments of silence or meditation, I feel great waves of joy. I feel peaceful, secure and safe. Perhaps in the depths of my being, there is a place of beautiful silence where I meet my Creator and where I find renewal of body, mind and spirit. Perhaps true success and peace emanate from this silent sanctuary.

Many years ago, I wrote the following: “Whenever problems seem to get the best of me, whenever I feel them closing in on me, I go to a quiet place that lies somewhere in my soul. I do not reason, analyze or think. Those will come later. I simply go. From this place of silence, I garner strength and inspiration to stand firm in the face of fire, to be calm in the midst of thunder. When I emerge, the world has not changed, but I have. And in changing, a whole new world is born.”

I find that is as true today as when I first wrote it or thought it. Success, whichever way we define it, whether by money standards, health or happiness standards, is not a game of chance. It springs from deep within us, from our deepest thoughts and beliefs. It has to do with our fears and hopes and it flows eternally from our spiritual center of gravity. Go into the silence within you. Try to do so a number of times each day. Let your true self speak to you. Listen to the “still, small voice”, which is always there. You will find calm, peace and prosperity unknown in ordinary times. You’ll find a new and joyous path opening ahead of you and you’ll be delighted in the glorious adventures that await around the corner.

John Harricharan
http://www.articlesbase.com/self-help-articles/a-matter-of-becoming-still-spirituality-information-135177.html