HOW TO RAISE MONEY-SMART KIDS

From child-specific accounts to prepaid cards you load with pocket money, help your kids take responsibility for their cash

USE A CHILD BANK ACCOUNT TO SAVE

“Current accounts are best for instant access to cash, while regular savers and Junior ISAs are better to save and for money you don’t need to access regularly,” says money coach Catherine Morgan. Accounts for kids aged 11 and over let them set up direct debits and use online banking. There are usually no fees, most can be opened with a pound, and they usually get a debit card – plus they earn interest. TSB’s Under 19s Account gives over-17s discounts on AA driving lessons.

PICK A PREPAID CARD FOR SAFE SPENDING

Prepaid cards nimbl, GoHenry and Osper are for kids aged eight plus, but four year olds can use Rooster. Cards usually have an annual fee and won’t earn interest, but give parents control, instantly notifying you on the app when they’re used. “You can restrict usage, set limits and even blacklist certain shops,” says Catherine. Rooster cards have an account number and sort code, so family can pay in money for birthdays, while with GoHenry, parents can send a link to family to do the same.

HELP THEM SAVE

Prepaid cards can help kids save. “Encourage your child to set aside an amount each week,” says Clint Wilson, founder of nimbl. GoHenry, Osper and Rooster have savings pots, while nimbl allows kids to make “microsavings” each time they make a purchase – saving 50p every time they spend £5, say. Rooster and GoHenry can be linked to tasks, so if doing the dishes earns a child £2 per week, you can accept or reject the cash reward on the app, depending on whether they did their chores.

TEACH NEED VS WANT

“Accounts give more freedom,” says Catherine. “Explain to your child the difference between ‘needs’ and ‘wants’. Teaching the value of delayed gratification from a young age is great. Use wall charts, with columns for ‘need’ and ‘want’. Kids can choose which column the things they plan to buy should go in. A computer game is a want, new trainers might be a need. It’s important for them to feel the emotions surrounding wanting to buy something, so they can manage those feelings as they grow up and earn their own money.”

DON’T FEAR FEES

“Kids’ accounts don’t have overdrafts, as under-18s can’t borrow money,” says Catherine. Most cards will reject a payment if it takes the balance below zero. “Prepaid cards don’t allow children to spend more than they have or over their limit,” adds Clint.

KNOW THE COSTS

“The Natwest Adapt account, Barclays Children’s Account, Santander’s 123 Mini and TSB’s under-19s accounts are all free,” says Catherine. Rooster is free for the first month, then £24.99 a year, GoHenry is £35.88, while nimbl is £28, or £2.49 per month.