Empowering women to understand all financial aspects of life is my mission with Mrs Mummypenny. I was excited to be invited along to an event recently to listen and talk about this exact subject area. The Parent Trap was an event aimed at mums, or women whom will be mums one day to prepare yourself financially. Also, to give the audience some things to think about for the future. And all on the night that the Christmas lights switched on a few metres away on Regent Street.
The Cost of Children
The event was split into four sections, we first heard from Kath Sloggett who talked us through the financial stages of children. Firstly, the baby stage, into the toddler stage, into primary school and then secondary school. Children really are expensive. The big take out from this section was we should be maximising our income before children and putting as much aside for this expensive time. This makes me remember and regret opting out of that generous pension scheme prior to having children.
The biggest cost at toddler stage, presuming that you return to work and as experienced by me is childcare. Unless of course you happen to live near a parent or sibling whom might offer to look after your children free of charge. We did not have this luxury. Our children are now 11,9 and 6 and I work from home, handily not requiring childcare anymore. However, I did use a childminder for around seven years, at it’s most expensive we were paying £1,200 per month. I would estimate we have spent around £50k (ouch!) on childcare over the years.
Investing for your Children
We then heard from Rebecca Tunstall from Rathbones who was talking about investing. In particular investing for our children. We talked about the Junior ISA and bear trusts. Parents can save tax-free into a Junior ISA up to a limit of £4,260 (tax year April 18 to April 19). If there are grand-parents or other relatives wanting to save bigger amounts, then they can take advantage of the bare trusts.
This graphic shows the impact of compound interest and long term investing. £10k invested now could be worth more than £70k in 20 years time!
Pensions was the next subject on the agenda with Lisa Conway Hughes. I was pleased to see many women in the room raise their hands when asked if they knew how much was in their pension. The big take out from this session was that we need to look after ourselves before we look after our children. I am currently guilty of putting money aside for the children but am not contributing towards my self-employed pension. Eeeek.
Another interesting take out was a rough calculation of how much of our income we should be putting aside into our pensions based on our age. Very roughly take you age and divide it by two. That number is the % of your income that should go into your pension. As an example, I am 41, so I should be contributing 20.5% of my income into my pension pot. Double Eeeeek.
The final session of the night was with legal expert Rosemary Sharp. And we talked about protecting ourselves. We discussed the legal differences with marriage/co-habiting and property ownership. We talked about documenting deposits for property purchases. The importance of writing a will was discussed and stating a lasting power of attorney, a person nominated to make decisions if you cannot. And we talked life insurance. It was session that was needed, and we talked about many things that people see as a taboo subject.
We had plenty of time to network with guests before and after the speakers. It was great to see a room packed of engaged and interested women. Women who really want to empower themselves financially.
I’ll leave you with this image shared from Australia with an idea on how to engage children about money. Get your kids to save money in three different jars, smile, splurge and give. Teaching kids about savings, spending and giving to charity.
This is a collaborative post.