Teaching your kids about finance early can be a great way to set them up to be sensible spenders in adulthood.
Knowing how to sensibly manage your finances is an important part of growing up, so parents who are hoping to set their children up with these key life skills should start early to teach their kids about money.
Nowadays there’s a lot for children to spend their pocket money on, like the latest games, music and online must-haves, or just sweets! But instilling a sense of responsibility in your kids from an early age by talking to them about what they spend their pocket money on can be a great way to set them up to be sensible spenders in the future.
The habits we pick up in childhood will often stick with us well into our adult years, meaning it really is never too early to talk about financial wellbeing. However, this needn't be a chore and it can be a perfect opportunity to bond with our kids.
Don't be afraid to talk about money
Many parents might think that shielding their children from the realities of money and being financially aware is a way of preserving their innocence; however, it does little for their future financial wellbeing.
Talking to children early about how much things cost, perhaps letting them help you on the weekly shop, is a great way to start. Explaining what you can and cannot afford to spend will help them grasp the concept of money and begin their own relationship with finances.
Making children aware of the time it takes to earn their weekly handouts, and not just giving them money when they want it, are simple steps that can make a great deal of difference in helping them to understand the value of what they spend.
Make finances fun
A great way to get children excited to learn about finance can be to make use of games and apps that are specifically designed to give them the experience of managing their money. A range of board games are available to help kids grasp the principles of finance, such as evergreen favourites The Game of Life or Monopoly, as well as newer games like Cashflow 101 or Net Worth. It can be great fun to play alongside them and a real learning experience.
At the same time, kids these days are all about electronics, so downloading a few apps to help teach them about money can be a great way to engage on their wavelength. Options include PiggyBot (a digital piggy bank for tracking their spending), Pigby's Fair from NatWest and Bankaroo (a virtual bank for kids) are just some of the many to choose from. Just make sure you are vetting the apps first before downloading them.
Teach the value of saving
Kids want what they want, and they want it now. However, when it comes to money, this is not a healthy attitude to have.
Encouraging kids to save up for something they have their heart set on can therefore be an excellent lesson in both patience and the true value of money. For example, if your kids want a new bike or a game that costs £100, why not tell them that if they can save half for themselves, then you'll top up the rest?
This can be a good way to help them to learn that saving is important and that everything you want won't necessarily be available to you all of the time. It also helps them to focus on setting goals with their finances, as well as giving them the satisfaction that comes with having saved for what they want.
At Metfriendly, you'll find fixed-term saving plans and Junior ISAs designed to help create a nest egg for your children's future. Call us on 01689 891 454 if you'd like to know more.