Make your kids money savvy!

From pocket money to opening their first bank account, it’s important to teach your children about managing cash

Lots of us avoid talking L about money with children, thinking it’s a grown-up topic, but The Money Advice Service recommends discussing it with kids from the age of four to help them to be better at saving and budgeting as adults. Kirsty Bowman-vaughan – Children & Young People Expert at The Money Advice Service – reveals how to approach the topic.

start Children saving early

Getting children to put aside a bit of money each month is a great habit, so saving is second nature. By reserving just £5 a month for 18 years, your child could end up with enough for driving lessons or for a deposit for their first rental property,” says Kirsty. “Until children are old enough to stash away pocket money or birthday cash, you can save a little for them each month. Set up a standing order to build up a lump sum.”

open a kids’ account

“Having a savings account makes children more money aware,” says Kirsty. “Over sevens can often operate one themselves and, depending on the account, they can take out and pay in money. Get them to deposit cash at a branch and let them know how much money they have. Some accounts also provide a gift – like a money box – which can be a great incentive.”

don’t pay for everything

Equip kids with the confidence from an early age to buy things with their own money. “Instead of spending on treats for them during your weekly shop, give them the cash and explain to them that they can pick what they want, but when the money is gone, it’s gone,” advises Kirsty.

discuss it as a family

Bills are an everyday reality so there’s no need to wait until adulthood to be aware of them. “Include children in discussions about bills to give them an idea of how a household runs,” says Kirsty. “Don’t worry them by discussing concerns, but explain things like energy tariffs in an interesting way – eg tell them that by turning off the lights you’ll have to spend less money on bills – leaving more for fun things.”

Be age-appropriate

“For the very young, just getting them used to what money is can be a start,” says Kirsty. “Let them handle it and explain what it is.” You could also buy books, like the Money Smart Gang series. For older kids, give them the chance to get used to digital money, like mobile banking. And, of course, a weekend job will work wonders!