This is the best way to save for your children

On their 18th birthday, the child gets full legal rights to the savings that are in their name.

– It is an incredible long-term saving. It will be a lot of money. And all of a sudden when the child is 17 years and nine months old, you as a parent may start to realize that it might do more harm than good if my child gets access to this amount of money, says Caroline Törnquist.

If the money you save is in your child’s name, the parent has no legal right to move money from their minor child’s account to their own – even before they turn 18. No matter how well-intentioned one has, according to her.

– My child can be very wise with money, but they have friends who might influence them. ‘You who have so much money can probably lend me some’ or ‘take the bill and I’ll swipe you later’.

Think about the purpose

To avoid the pitfall, it is therefore particularly important to think and plan before the actual saving. Start by thinking about the purpose of the savings.

– If the purpose is for my children to have access to this on their 18th birthday, perhaps to get a driver’s license or to be able to take a “gap year” trip, then you can save in the child’s name, according to the family law lawyer.

But if the purpose is more long-term, perhaps for a cash contribution to a home, it may be wise to have that savings in your own name then and direct it to the child when the time comes.

– Then it is important that you enter it in the will if it is to go directly to the child or whoever now inherits. Or if you save in capital insurance with the child as beneficiary, says Törnquist.

Split the savings

According to Törnquist, a good way can be to divide the savings depending on the purpose. It can be healthy to leave a savings account in the child’s name that they will have access to on their 18th birthday.

– Then you can start another savings with another, slightly longer-term savings that you yourself dispose of until the child is 21, moves out of home or gets a home, she says.

Save according to your own ability

It’s a recession with tough financial times for many, making it hard to save. According to Törnquist, it is important to remember that it is a long-term saving.

– It is enough that you save a small amount. A 50 note a month, if you have the opportunity. It will be large sums, because it is a long-term saving.

– But at the same time, your child should not be richer than you. So it is important that you have your own buffer as a parent, continues Törnquist.

If, as a parent, you want to give your children money in the form of a gift, for example when it is time to buy your own home, it is important to remember that it counts as an advance on the inheritance, emphasizes Törnquist. In this way, you can give your children a larger sum without saving in their name.

– Then I think it is very important that you make a gift letter, she says.