Starting conversations about money early on in your child’s life can help them have a better relationship with it as they grow up. This doesn’t mean a serious sit-down chat, but making sure to plan activities and habits that help them to understand how to spend and save sensibly – these can prove to be highly beneficial in the long run.
Open a Bank Account
Depending on your child’s age, it may not be practical to open a bank account they have full control of. But there are many options out there that allow you to control the money your child is saving, such as junior ISAs from Wealthify. Not only can accounts like these help little ones understand more about the financial world, but they let you put aside cash for them to use when they’re starting out in the world themselves.
Giving your child a little spending money on a weekly or monthly basis will teach them valuable lessons about budgeting and saving. This is particularly true if they receive this money for doing tasks around the house, as they’ll begin to understand that money needs to be earned.
You shouldn’t put pressure on your child to spend their pocket money when they get it, or emphasise that they need to save for the future. Instead, explain that they can buy whatever they want with their money now, or they can wait to buy something bigger a few months down the line. But remember, pocket money is supposed to be fun, so make sure your child spends it on something that makes them happy, like sweets or a magazine, rather than something essential that you would buy for them anyway.
Improve Your Own Habits
Children will look to you to learn about everything and that includes money. If you have trouble managing your finances, know that your child may be picking up these bad habits. Without realising it, you could be teaching them it’s ok to use your credit card for things you really want but don’t have the money for. Being too focused on budgeting and saving can have a negative impact as well. While it’s perfectly understandable to watch the pennies if money is tight, try to make sure your children know it’s alright to spend money on things they need.
Playing games is one of the most fun ways to teach children about money and the popular board game Monopoly can be the perfect place to start. But this isn’t the only way, many interactive online games can provide a safe space for children to understand how money can be used and earned in the real world.
As your child gets older, they may have more questions about money and concerns about their future finances. It’s important to be open and honest about these things because sugar-coating financial realities won’t help them. Everyone wants their child to be financially secure, but if they aren’t educated about loans, interest and debt, they may struggle. If you’re not sure about any of the questions they have for you, remember they can always have a chat with someone at their bank for more detailed advice.