How to set your teen up if they’re flying the nest whatever your budget – from £10 to over £1k

AS hundreds of thousands of school leavers start an exciting new chapter, families want to mark the milestone. Many have saved money over the years to give them the best possible start to adult life. But now the moment’s here, what’s the best thing to do with that money? Mel Hunter speaks to the experts to find out how to best spend your cash on your teenager We’ve given you a rundown of the best ways to spend a nest egg for a teenager heading off to uni or their first job Credit: Getty This year 350,000 young people will be to heading to university, up to 100,000 starting apprenticeships and a further 200,000 getting a job. So if you have been saving up to give your-not-so-little one a head start as they set off into the real world, we reveal the best ways to kit them out for life whether your budget is £10 or £1,000. If you have up to £50 – book or vintage toy Retro toys often increase in value and become a collectable so if you still have any from their childhood, they’re worth passing on A small price tag can still have a big impact. A £10 book that encourages someone to start investing, avoid debt or negotiate their salary could be worth thousands over a lifetime. The Psychology of Money by Morgan Housel, from £8.49, has sold more than 10 million copies and remains a finance bestseller. Will Rainey, a financial educator and author of kids’ money book Frankie Fortune, says: “A book is an investment of your time, meaning there’s a greater chance of taking the actions compared to a short video or article you find online.” Want to spend less? Pick up second-hand copies on Amazon or World of Books. We spotted The Psychology of Money for £3.50. Another valuable lesson is giving them something to save. A bottle of wine with instructions to open it only after celebrating a major milestone teaches delayed gratification. Will says: “Patience is a superpower when it comes to being financially healthy and wealthy.” If you have toys from their childhood gathering dust, pass them on as an investment. Pokémon Cards, early Star Wars Lego sets and Tamagotchi ‘pets’ were popular with noughties’ kids, and are likely to grow in value. A rare Tamagotchi Connexion Version 3, costing under £20 originally, recently sold for £72 on eBay. If you have up to £100 – railcard or insurance Railcards aren’t cheap but are a great investment as they can save students hundreds in the long run Credit: Alamy Setting someone up for life can also mean showing them ways to budget. For something that lasts years and saves more than £600, Sarah Coles, head of personal finance at AJ Bell, suggests a three-year 16-25 Railcard. Costing £80, you save £25 compared with buying the £35 annual Railcard each year. It gives a third off most rail fares, saving an average of £212 a year. Sarah says: “Once they’re in charge of their own budget, they will probably find it very difficult to stretch to that sort of thing.” Hold off if they’re setting up a student bank account, as the Santander Edge four-year student account includes a free four-year 16-25 Railcard, worth £115, along with an interest-free £1,500 overdraft and £20 cash. With around £100 to spend, you could do worse than a home contents insurance policy, says Sarah. An average student’s policy costs around £75 for the year, according to MoneySuperMarket. “They may not love you for it, but they could thank you further down the line,” she says. Check if they’re covered on your own household insurance first, so you don’t double up. If you have up to £300 – skills course or headphones Noise cancelling headphones will be a welcome gift for students or frequent travellers Credit: Getty For this budget, you can help them build skills for life. A course — DIY, vehicle maintenance, or a professional course — could save or make them money for years to come. Search options at your local adult education services, further education colleges and City & Guilds centres. A 10-week evening course in DIY skills at Macclesfield College, for example, costs £180. Travel can also be an investment, teaching independence and budgeting. The most popular under-27s Interrail pass for seven days’ travel within a month costs £245. Buying a camping kit could set them up for years of low-cost travel. Will says: “It’s a great way to show the best experiences aren’t always about luxury.” Those heading to noisy universities will thank you for noise-cancelling headphones, says Rajan Lakhani, head of money at financial app Plum. Apple AirPods Pro 3 are a Which? best buy at £199 with a two-year guarantee at John Lewis with student discount. Best under £100, according to Which?, are JBL Tune 780NC, currently £69.99 at Argos. If you have up to £1,000 – driving lessons or tech Driving lessons are a sure fire way to set them up for life with a key skill that can boost their earning Credit: koumaru An investment which should open doors throughout life is driving lessons. While passing your test costs more than £1,500 on average, including around 40 lessons from £35 each, getting a licence pays off. Sarah says: “Being able to drive adds a skill to your CV, and if you’re somewhere with poor public transport, it widens your opportunities significantly. It could make tens of thousands of pounds worth of difference to your career.” A decent laptop is essential for most to study, apply for jobs or start a business. The new Apple MacBook Neo is Apple’s more affordable laptop — usually £699, but student discount brings it down to £599, though plenty of other decent laptops cost far less. For any tech, compare prices, check deals on Idealo app, and consider refurbished models with warranties. Look for student discounts, buy only the specs you need, trade in old devices, and hunt down cashback offers. Something you can give regardless of budget – ISA Kicking off a savings habit by opening an ISA is a great way to set your children up regardless of the deposit amount Credit: Alamy One of the best things you can do with any financial gift is help a child develop a savings habit. From age 18, they can open an ISA, saving up to £20,000 a year tax-free — a bit of cash to kick-start the habit is worthwhile no matter the amount. A Lifetime ISA (LISA) and a standard ISA both offer tax-free growth. A LISA suits first-home or retirement savings. Rajan says: “Alongside the interest offered by your provider and the tax benefits of an ISA, they will also get a 25 per cent government bonus on savings of up to £4,000 a year.” A standard ISA offers easier access for university costs or emergencies. There’s no government bonus, but all growth is tax-free — many young adults use both. Where to put children's savings whatever their age Putting money into savings for children is a great way to get them started and teach good money habits regardless of their age For babies and young children Invest, says Sarah Coles: “There’s plenty of time to ride out the ups and downs of the stock market and take advantage of long-term growth.” For secondary-school children If they won’t need the money for at least five years, investing still makes sense. “As they approach the time when they’re likely to need the money, you might want to move to less volatile investments, or into cash.” They may not need the money at 18, so you could have longer to invest. As they get older, give them an allowance covering more of their spending to help them learn to budget and save. Sarah says: “Banks often offer children’s savings accounts with better rates than adult accounts. However, when they hit 18, this will drop away, so one of their first jobs as an adult will be to shop around for a more competitive home for their money.” Approaching 18 If they are likely to need their money soon, choose a cash ISA rather than stocks and shares, says Sarah. “You could consider a fixed-rate account. At the moment you can get almost five per cent fixed for a year or two.”