Give your kids a financial kick start

Blink and before you know it your children are heading towards adulthood and becoming increasingly demanding on family finances.

Suddenly, your ‘to buy' list is getting longer with university costs, weddings and new cars placing additional financial pressures on your bank account.

In a recent study, students have estimated their annual accommodation and other living costs at around £4,900 with tuition fees costing up to £3,145 per year. In the current credit crunch climate, parents are likely to find it increasingly difficult to budget for this expense, but the alternative is seeing them start their adult life burdened with debt.

So to give your children the best financial start you can, consider regularly investing in actively managed funds for the long term as an answer to helping you finance some of these heavy outlays in later years.

For example, if you had invested £50 every month since 1989 in the M&G Recovery Fund, 18 years later when your teenager is starting university, your investment would be worth over £27,000 compared to £15,503 if you had put the money in a building society savings account, easing the strain on family finances considerably.

Jonathan Willcocks, managing director of global sales at M&G comments: "As a parent myself, I am very aware of the demands that children can make on your finances, so, by investing regularly in an actively managed fund such as the M&G Recovery Fund, parents can look to ease the strain with an investment that grows over the long-term. Citywire AAA rated Tom Dobell, who manages the fund, has a proven track record with top decile performance every year from two to ten years and since he took over the fund."