I have recently become a father for the second time so kids are top of mind for me.
I know a lot of parents are keen to help their kids get set up for life from a financial perspective.
We hear a lot about how unaffordable housing is, how much student debt is floating around and generally how hard it is to start an adult life. It's easy to understand, then, why parents want to do what they can to help.
Savings account: Most parents set up a savings account for their kids. This is good because it's simple, often free and the money is there when you need it. But the interest rates on offer at the moment are not great, and it can be tempting to dip into a savings account.
Managed funds: When you've got a long time until you need your money, it makes sense to invest it a bit more aggressively.
You could set up a regular deduction from your bank account to a managed fund.
If you select a fund that suits your risk tolerance, you can then let the professionals handle the precise asset allocation and do their best to maximise the returns on your money. You can do this through an investment provider or bank. ASB says saving for university is the third most common reason people set up an investment with it.
KiwiSaver: You could start a KiwiSaver account for your kids. The benefit of this is that the fees tend to be cheaper than other managed fund investments. But there is no longer the $1000 incentive available to new members and the funds are locked up for a first home or retirement. If your kids decide they'd rather have the money for uni, for example, they're out of luck.
Tertiary accounts: There are providers that offer vehicles set up specifically to save for kids' education. ASG's Education Fund is open to kids under 10 and parents must commit to regular contributions. They start at $10 a week but are more expensive the older kids are.