Youngsters can’t be expected to suddenly get the hang of managing their finances: it’s a skill that needs to be actively learned, not picked up along the way.
If kids only get to learn about money through overhearing conversations when their parents are stressed over bills, then their attitude towards home finance might not be too healthy.
Yes, most schools will now include some sort of financial education, but this is usually limited to a couple of lessons. And we all know that sitting down to lecture the kids on money management might not be all that successful.
Here are some alternative strategies for you to try.
Help them open a bank account
Give a youngster some control over their money if you want them to start taking their financial education seriously. In the UK, children can open a bank account from as young as 11 – and giving them that responsibility can be a great way to demonstrate that money does matter.
Make sure you don’t simply do everything on their behalf; by going through the paperwork together and discussing what it means to have your own account you can turn this milestone into a great learning moment.
Explore money management apps
Yep, there’s an app for that. In fact, there are several – the range of financial education apps means that there are plenty of fun ways to help your kid get better with money. Little digits, for instance, is a game-based iOS app that can help the youngest kids get to grips with numbers.
For the older kids, there are a couple of excellent apps designed to make pocket money mimic adult banking. GoHenry is the gold standard, offering a prepaid debit card that you can load money onto as well as a handy banking app that can be loaded onto an older child’s mobile phone.
The card can be used just like a regular debit card, and it’s possible to set aside savings – but as a parent or guardian, you’ll have a lot more control than with a regular bank. Osper is an alternative with many of the same functions but working in conjunction with Mastercard rather than Visa.
There are also some great web resources out there. One that is particularly kid and teen friendly is Barclays LifeSkills, which shares resources written in a kid and teen friendly way.
Let them make some financial decisions
For teenagers, it’s a good idea to let them start taking control for some of their own financial decisions. We’re not suggesting that you hand over the responsibility of paying bills, but if they have control of their own budget then there is a real motivation to get cash smart.
It is sensible to give a teenager a regular, fixed amount of pocket money that they have to budget to fit their needs, rather than ad-hoc payments when they ask for something.
There are a lot of different ways to manage your money, so we’re not suggesting that all children should be given the same prescriptive rules. But knowing the basics, such as how to budget and save, is a great way to set them up for a successful financial future.