A TODDLER’S mum has started taxing her daughter’s pocket money – in a bid to help her become a millionaire when she grows up.
Money blogger Charlotte Burns from Swansea shared her latest top tip for savvy saving.
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Charlotte, who also runs money blog lottyearns, revealed she will be taxing her toddler’s pocket money.
Charlotte took to her blog in the Times to explain her latest decision.
She wrote: “The earlier you introduce your child to shopping, budgeting and saving, the better they will be with money as adults (in theory, anyway).
“Now that I have a toddler – Tilly, who is just beginning to understand the world – I have come up with a big plan for her financial education and it starts with pocket money.”
Charlotte reasoned that interest earned on the savings could see her daughter become a millionaire.
She shared her article on Twitter, saying: “I thought I’d be getting backlash for this! So what do you think, would you tax your child’s pocket money? (Maybe I’m just a mean mum!)”
Some thought the idea was a genius way to help the little ones save up.
On fan commented: “It’s a brilliant idea. Good from you. My dad used to take ‘chip tax’ but he ate the chips rather than did something good with them. I like your idea better.”
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But when Charlotte posted a Twitter poll below, it was clear not everyone was as big a fan.
The results showed 65.5 per cent voted no, when asked what they thought of her strategy.
One comment read: “I love/hate this. It’s great; but I barely have a pension of my own, so now we’ve got a house that’s going to have to come first.”
In her blog, Charlotte explained the logic behind her plan.
She wrote: “If we save and invest on her behalf for the first 18 years, could she become a millionaire later by 60? It’s possible.”
The plan is to put the maximum amount into a junior self-invested personal pension (Sipp), which is £2,880 a year.
Charlotte and her partner will pay this monthly, so their goal is to put in £240 each month for 18 years, which will be invested.
Charlotte’s daughter Tilly will also get 20% tax relief from the government on top, amounting to an extra £720 over a year, the budget-aware blogger explained.
She added Tilly may have £64,800 in her pension pot by the time she hits 18.
While Tilly won’t be able to access the money until she’s at least 57 due to pension rules, the cash is likely to be invested for another four decades.
So, Charlotte explained, the toddler could end up with £1million in her pension by the time she’s 60.
It comes as the cost of living crisis continues, and many parents are looking for ways to save cash.
And Charlotte’s not the only parent to make decisions to plan for her child’s financial future.
One woman took to TikTok to share the ‘best’ pocket money system – and claims her dad’s monthly budget was the key to making her so good with money.
Meanwhile, mums are trying to teach their kids a host of money saving tips from an early age – including saving ‘little and often’, cutting down on car use – and learning to cook at home.
A poll of 1,000 UK mums with children aged six to 17 found 79% were trying to pass on money-saving tips and tricks to their children as they grow up.
