Teach Your Child a Lesson in Finance
Teaching children how to save from an early age is an important lesson for their long-term financial wellbeing.
Children start to build their money habits as early as five years old, and their view of money can be set by the age of seven, according to the Money and Pensions Service.
If you want to help them nurture better saving (and spending!) habits then here are some ideas:
- Give your child a simple weekly allowance to teach them the value of money. Regular pocket money encourages them to save up for more expensive items.
- Many small children like to play ‘shop’. Help your child display toys or food for sale and make price labels. Give them a purse full of coins or ask them to design banknotes in different colours for different denominations. Then take turns as customer or shopkeeper, exchanging goods for money and counting out change.
- Try setting process for chores to help them understand that money needs to be earned. Even younger children can help by setting the table and keeping their bedrooms tidy.
You could offer to double any money your children are prepared to put aside in savings by a certain date.
- Give your child a budget for a fun family meal. Ask them to plan the menu, write a shopping list and work out what they can afford to buy, based on the prices at whichever supermarket you use for online deliveries.
- Teach your child the difference between ‘good spending’ and ‘bad spending’ by writing a list of things they want to buy and cross out the items they don’t really need.
- Teach your child about investment by setting up their own savings account so they can see the money they put aside growing.
- Encourage a mini-entrepreneur by motivating them to sell unwanted toys, books and games on eBay or other selling sites.
- With the pandemic making it more difficult to get to the shops this year, how about asking grandparents, aunties and uncles to put some money in your child’s savings account to set it aside for the future or a larger item?
Credit Unions have junior savings accounts, with some schools now partnering with their local credit union to offer school savings.
This method of saving has a positive impact on young people by creating good financial habits while also allowing them to develop basic accounting, book-keeping, teamwork, record-keeping and organisational skills.
You can also open a junior saving account directly with your nearest credit union and watch their deposits mount up for that special occasion, toy or outing.