Start small, and speak often – empower your kids to make decisions about money and saving.
Teach Your Children to Save Day
This Friday is ‘Teach Your Children to Save’ Day but teaching children about money in an increasingly cashless society can be hard. Money, savings, and investment may seem complicated, so here are five tips on how to teach your children to save:
- Talk about it! We are all naturally reserved when talking about money, but with children it is important. Talk about the reason you go to work, what earning money means, and what different things cost. Talk about how much things cost relative to each other and ask your children whether they think that’s right.
- Use cash. One of the biggest challenges today is money is intangible. We all use our debit or credit cards and pay with contactless cards. Using cash is tangible and shows children what money “is”. You can even go one step further and allow them to pay using cash. This helps with maths, adding up the price of things and working out what change they might be due.
- Encourage them to earn a bit of money by doing odd jobs. Again this helps to show the value of money and the concept of earning and work. If you pay them in cash, you could then even allow them to spend that cash or perhaps take some of it to a bank or building society and put it into a savings account for them. For older children you can have more detailed conversations about savings, interest rates and even investing. The idea they could own a little bit of Tesco or Marks & Spencer makes for an interesting conversation when out shopping in those retailers.
- Show them other ‘money’. If you are on holiday overseas make sure you get some local currency. Explain that not every country uses the same money. Talk about the pictures on the notes – they may well depict the head of state, for example, or places of interest. Talk about the exchange rate and work out whether familiar things cost the same e.g. a favourite chocolate bar or can of drink.
- Lead by example. Children learn by example, so the best way to teach your child about saving money is to save money yourself. Have your own jar of money that you put coins in regularly. You can also show your children what their Junior ISA or CTF has become worth over a period of time relative to what you have contributed on their behalf.
We know learning things early makes us more likely to understand them when we grow up, so it’s absolutely crucial we talk to our children about money and saving when they’re young. It may seem awkward or complicated, but it doesn’t need to be technical and it can be done as part of everyday conversation.
Start small, and speak often – empower your kids to make decisions about money and saving, offering rewards if they save their pocket money or cash earned from chores. You can even talk about investing – tell your children you own a little bit of the companies you shop in every day to spark their interest, or point out famous companies which are doing well or badly. If you’re investing in their future, tell them about it – they can check their JISA and CTF account and watch the balance rise.