Saving money for your children’s future: how to fund their gap year travels

Saving money for your children’s future: how to fund their gap year travels

How much does a round-the-world ticket cost? £1,500? £10,000? The answer varies depending on the length of the trip, and the number of stops. Either way, it’s a costly affair. But travel is good for young minds. It helps them develop in new ways, becoming more creative and outgoing. So if you’re saving money for your children’s future, then you might think about including the cost of travel.

The mutual society Shepherds Friendly, one of the oldest financial mutuals in the world, produced an infographic to guide parents on how much they should be saving towards their children’s future. 28% of parents, according to money.co.uk, can’t afford to save anything. If you’re in the remaining 72%, here are some figures you should tot up.

What would you like to budget for, when saving money?

Shepherds Friendly have identified some important items to save for: a deposit on a house, a new car, and university tuition fees. If you wanted to include these in your total amount of savings, here are the figures you need:

Housing deposit: the average price for a first-time buyer in the UK is £177,000. That increases to £470,000 in London (which is where we live, so I’ll use that amount). If our children wanted a deposit of 10%, we’d need to save £47,000 to help each of them out.

First car: When the average cost of the car, driving lessons and car insurance are totted up, this figure is somewhere around £6,500.

University fees: this can be somewhere upwards of £50,000.

So, when the £10,000 of a round-the-world ticket is included, the grand total would be £113,500.

So that’s £227,000 for our Pigeon Pair.

Gulp.

Shepherd’s Friendly recommend calculating what you can afford to save each month. Then, multiply that by twelve months, to come up with your annual savings. Work out how many years you have left to save, and multiply your annual savings by that amount. You then have your final total.

I’m going to do the calculation in reverse, based on our aspirational figure of £227,000. Our son is eight, so if we wanted to give him the money when he was eighteen, we’d have ten more years. That’s £22,700 a year. And if I divide that by 12 months, then the amount we’d need to save is £1,900.

This is a hefty amount indeed. Better start saving, and hard……

Have you started saving money for your children’s future, or travel in a gap year?

This is a collaborative post. All views are my own.

 

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