“Should we just stick with the child savings plans we’ve started, or is investing for children in other ways a smarter move?”
That was the honest question I received from a mother of two who recently reached out to me.
She wasn’t just thinking about short-term savings for toys or holidays. She was thinking long-term — deposits on homes, financial independence, giving her children a head start most of us never had.
And she’s not alone.
From Piggy Banks to Portfolios
Let me start with this:
If you’ve ever wondered whether child savings plans offered by insurance providers are enough, then you’re already ahead of the game.
Most people don’t even get that far.
This mother — let’s call her Sarah — has already set up savings plans for her four-year-old son and newborn daughter. That’s commendable. But like many financially savvy parents, she’s questioning whether these basic plans are really going to move the needle in the long run.
And here’s the truth:
They might not.
Traditional child savings products often generate low returns. In today’s economic environment — with inflation outpacing bank interest — what looks like a safe choice may quietly be losing value in real terms.
So, What Are the Options?
Sarah brought up a great point — she’s been investing in the S&P 500 for the past decade and has seen consistent gains of 8–15% annually. When you compare that to the 1–3% typically offered by local child savings accounts, it becomes pretty clear why she’s questioning the status quo.
Investing for children through diversified, low-cost index funds or ETFs can give your child the power of compound growth over two decades. You’re not just saving — you’re building generational wealth.
But of course, it’s not without risk.
There are periods of market stagnation — just look at the early 2000s. This is why you should only invest money you truly don’t need in the short term and ensure you have a long enough timeline (10+ years).
Security vs. Growth: Why Not Both?
One great approach is a hybrid strategy:
- Keep a portion in guaranteed child savings accounts for peace of mind
- Invest the rest in a diversified stock portfolio with long-term potential
This way, you balance emotional security with wealth-building opportunities.
The Emotional Side of Money
Let’s not forget the psychology behind all this.
Many parents — especially mothers — carry immense pressure to “get it right” for their kids. That includes financial planning. But sometimes, over-caution can rob your children of future advantages.
If your child ends up with €20,000 at age 25 thanks to conservative saving, that’s wonderful. But what if, with careful investing, that could’ve been €45,000 or more?
That difference might be the down payment on a first home… or the seed funding for their dream business.
Make It a Family Conversation
Another point often overlooked in investing for children is involving them in the process.
When they turn 12, 14, or 16 — start introducing them to money concepts. Show them how their savings are growing. Talk to them about risk, patience, and the long game. Financial literacy is not taught in schools… but it can be taught at home.
The goal is not just to leave them with money, but to equip them with the confidence to manage it.
Let’s Talk Practical Next Steps
✅ If you’re comfortable investing yourself, setting up a child ISA (in the UK) or similar tax-efficient account can be a good start. Use brokers like Trading 212, Vanguard, or DEGIRO and automate monthly contributions.
✅ If you’re not comfortable managing it alone, speak to a licensed investment advisor — or join our MoneyHub Community, where we break down these concepts step-by-step for parents like you.
✅ And yes — continue reviewing your current child savings plans annually. If returns are weak, you might decide to redirect those funds elsewhere.
In Summary
Investing for children goes beyond just picking a product. It’s about having a long-term vision, balancing risk, and educating them along the way. There’s no one-size-fits-all answer — but doing nothing is not the answer either.
If you’re unsure where to begin, start by asking yourself this:
“Do I want to simply save for my children — or set them up to build wealth?”
There’s a world of difference.
Want to Learn More?
📥 Join the MoneyHub community and start exploring investment options step-by-step.
Or…
➡️ Book a free Clarity Call to discover how we can guide you through your first investment and set a personalised plan that aligns with your values and goals.d goals. your first investment and set a personalised plan that aligns with your values and goals.
———————— About the Author: Luca Caruana
Hi, I’m Luca — a Certified Money Coach and educator, passionate about helping individuals break free from limiting beliefs and build lasting wealth in a world that’s changing fast.
My mission is to empower clients with both the right mindset and the right tools — blending deep financial coaching with the power of AI-driven investing strategies. Whether you’re managing your first budget, building a confident investment plan, or exploring how ChatGPT and other tools can make you a smarter investor, I’m here to guide you.
With over a decade of experience in personal finance, investing, and mindset transformation, I’ve supported hundreds of clients in rewriting their financial narratives. My approach combines psychological insight with practical, tech-enhanced tactics — so you don’t just learn what to do with your money, but how to think differently about it.
If you’re ready to embrace a new way of building wealth — one that’s grounded, future-forward, and more accessible than ever — let’s connect. Your financial breakthrough might be one smart step away.
Let’s talk and start transforming your financial future today.