Although maths remains a focal point for most schools, financial education is too often a blind spot in the curriculums of children – writes Laura Pearson
If you want your child to learn self-sufficiency when it comes to handling and earning money, it’s important to teach them yourself (and early on) – here’s how to get started.
We promise we’re not working for your kids – a weekly allowance is actually a great way to help them learn about the importance of saving, investing, and long-term fulfilment. Most importantly, it’s a safe exercise for them to make mistakes – if they’re wasting money at a young age, you’ll be on hand to help them understand how to avoid this in the future.
You could even help them to open a savings account in their own name. Many banks offer ‘youth accounts’ that have lower minimum balances and joint ownership, so you can see their activity and help them to track spending.
You might also decide that it makes sense for your child to ‘earn’ their pocket money. Sometimes, they can do this by completing chores like washing up, sweeping the lawn, watering plants or cleaning their rooms. Alternatively, you could reward the kids for good grades at school, offering a tier system that corresponds with their achievement.
These methods are great for helping children learn the importance of working for their money, but they can also create an overly transactional relationship with schoolwork or chores (that sometimes should be done because it would be fair, not because it’s paid) so remain wary. If you’re unsure of how much to allow, check with the recommended amounts, provided by experts online.
Having money is one thing, understanding it is another. Recent statistics found that 74% of teens were not confident about their financial education and it often falls on the shoulders of parents to buck this trend. A good place to start is by allowing them to accompany you to the bank. Sometimes practical examples are the most memorable and, with experts on hand, you’ll always be able to provide an answer if questions become too complicated.
Alternatively, there are now plenty of excellent educational channels available online via Youtube or other platforms. Many from the younger generation find they learn better through video content than by reading or oral explanation.
If these don’t appeal, there are even games and interactive programs to help your child become more comfortable with numbers and moving finances around.
Don’t Dumb It Down
When it comes to expanding a child’s vocabulary, the experts tend to agree that there’s no need to ‘dumb things down.’ This stands true when it comes to financial education too, for which there are a lot of complicated terms and labels. Consult with online glossaries and, remember, it can be a huge advantage to explain such complexities early on in their development.
This mantra may ring especially true when it comes to major financial issues such as homeownership. It’s important that we teach our children the importance of owning property, building assets, and creating financial security. An in-built understanding of how markets can shift, favouring buyers or sellers, will come in handy not just for purchasing a home but in all walks of life. It’s not always easy to get the intricate points across but many of the general ideas are simple to explain and there are plenty of estate agents scattered around to be used as practical examples.
Finances can be complicated and, worse, boring! But they’re also important to understand and your children will thank you if you send them into their teenage years equipped to handle their own money matters. Get a jump on the simple stuff now to give your child time to work their way up to the bigger, and more intimidating hurdles later.
DIY Investor helps its readers to take control of their financial futures by understanding investments, ISAs, pensions, SIPPs, income in retirement, and robo-advice. Learn more at: www.diyinvestor.net